ADR BLOG

With the 2:1 Buydown consumers have a chance to catch their breath. Never before have rates on mortgages tripled within a year. That's what the Fed is doing now. Rates are going much higher and people wishing for rates to fall within the near future are plain wrong. The 2:1 buydown allows consumers to stay in a fixed rate mortgage without being subjected to the super high rates we've been seeing. The Fed will continue to raise rates in order to make the dollar much stronger and achieve the geo-political outcomes that the Fed desires (see earlier blow from September 2022).

Mortgage Rates will likely rise to near 10% in 2023. We will see housing start to recede as the economy starts to move into a recession (perhaps as early as Q1-23). CD rates will top 5% for short term durations. However, housing prices in stronger markets will remain resilient. There will be cracks in outlying areas - as I've written about for many years - country housing is really hard to sell when the government controls all underwriting and forces local appraisals. We will see those markets crack first. 

Past blogs have discussed the fact that roughly 60% of homeowners are locked into their home for at least 10 years. Why move? You own it outright. You have a 2.25% 30 year fixed (if you were smart enough to work with ADRMortgage.com and time the market right). While many banks didn't give you that rate, we had plenty of clients get super low rates in the 2s. 

In summary, housing prices will stay sticky and not fall in strong job market geographies. Think areas of your state where there is a strong bond between Universities, Tech companies, innovation and government. That's why I like Capitol cities. Where do you think the State is going to spend money? In the Capitol of course. Happy house hunting and remember, enjoy your life. Just because you may have missed out on the smartest investment period of a generation (2021 home purchase) doesn't mean you have to give up. You have to live somewhere. Make it your home. Disclosures may be found on this website www.adrmortgage.com

Posted by Andrew Walter May CEO on November 8th, 2022 6:28 AM

What's really going on with the housing, stock, and bond markets worldwide? We know housing is cyclical - but stocks and bonds move much faster (variability). I get asked all the time my thoughts on what's really going on.

 Yesterday I realized, or at least theorized, that the geo-political landscape is really driving FED decisions. Here's some data to wet your appetite:
 1. From Q2-22 to Q3-22 USA Stocks down $9+ Trillion (just the change, not the base);
 2. Russian GDP (the entire country's total goods produced and sold) is about $1.5 Trillion per year (a little envy there as the USA GDP is $20 Trillion per yr).
 3. Russian per capita income per year is $11k (China is $9k) and USA is $60k. Income distribution favors the few - but suffice is to say many in the USA are making many multiples of the average workers in communist countries above.

 Enough data - what's it mean. My thinking is that if the USA wants to stop the Russian invasion and potential WW3 scenario the best way to do that is to:
 1. Bring oil prices back to $50 a barrel;
 2. Lower raw materials and natural resource prices;
 3. Continue to send arms to Ukraine and expose Russian weaknesses so the Russian's don't attempt to take over another several Russian speaking countries (Russia has about 140M people and shrinking). No one is taking Russian speaking classes, and they're in danger of shrinking a lot further (not a winning hand).

 Enter the Fed.
 1. Raise the value of the dollar (Done! Ex: The British Pound is down 20% and almost at parity with the dollar).
 2. Increase interest rates to crater worldwide asset values and cause depression in Russia.

 This is, in my opinion, a great way to end the war in Ukraine (and potentially all of Europe). The pain is on all of us. But our sons and daughters aren't fighting and this proxy war should end once the Russian depression unfolds due to lower prices in raw materials (26% of Russian GDP).

 1. Russia's GDP is 26% Oil/Mining (majority of their exports); 68% Services (McDonald's and others are closing up shop); 6% Agriculture.

 Can the Russian population hang on making $8k per year instead of $10k when the income concentration is at the top percentile?

 What should you do in this market?
 1. Housing takes time to feel the pain - and you need a place to live. If you want to wait 5 years to find out you can. Or I'll tell you the answer now. Housing costs are up (to build) and housing isn't going to appreciate at 25% a year for a while. But is it going to decline? Probably not. It's a good place to store wealth so I'd continue to invest in housing.
 2. Stocks? They react very quickly and with the FED ending Quantitative Easing and selling $10T in balance sheet assets (on the USA Bal Sh), I'm thinking now is a good time to be 50%+ in cash. Yes, inflation is bad. But so is losing your principal.
 3. Bonds? They are starting to look good for the first time since 2013.

 I'd stay very cautious and stay in cash or housing and wait out the war.

Posted by Andrew Walter May CEO on September 28th, 2022 12:03 PM

The Future of Housing - Everyone's an Expert but here are the facts:
#1 - Housing starts are down 25+% from April to July 2022. Seasonally adjusted this is still down 10% since June 2020.
#2 - Just about every month over the last 66 months, housing prices nationally have gone up; including every month this year that data is available. Home prices are inflating still.
#3 - Home sales are down 38% from Jan 2022 to June 2022 nationally.
#4 - Inventory nationally is 10.9 months. This is a normal market, but your market will vary. In the Triangle we are all the way up to 1.5 months (this is still very tight). Of course, the headlines read inventory up 87%. That's just to scare you. 1.5 months of inventory is a sellers dream.
#5 - Mortgage rates are up from last year, when some country's rates were actually negative (they'd pay you to take their money). That was last year. This year, they are up and right now they are around 5.375% with 1% origination point (this is not an offer). This is better than when rates were at 9+% back in the inflation 1980s.

The above are facts. Where does this take us? First, there is a nationwide housing shortage for materials, workers, houses. Second the economy is super strong in areas like Oil, Tech (certain tech), Chips, EV cars, etc. With the fall off in new construction the multiplier effect should hit full throttle in Q123 - just in time for the new housing purchase market.

I have said that home prices will start to recede in 2022 (they are still positive), and in 2023 we're in for some markets to shrink in terms of pricing. Then, in 2024 we will see a significant shift to higher spending to prop up the economy as it's an election year.

We all know in election years, the Feds pump money to keep the economy looking rosy. We have next year, 2023, to worry about with certain housing markets that don't have job growth. Other than that, it's 2025 that I'm worried about for home price declines - if they come.

ADRMortgage.com. Andy May #103418. Andy May Group, LLC #88010. 919 771 3379. Equal Housing Opportunity. 8522 Six Forks Road, Suite 201, Raleigh NC 27615. Of course, disclosures may be found at the website at the beginning of this paragraph.

Posted by Andrew Walter May CEO on September 2nd, 2022 11:57 AM

ADRMORTGAGE.COM


Nearly 1 in 4 American homeowners have an interest rate below 3%. Another 33% paid cash for their home. That's close to 60% of Americans pretty much unaffected by rising mortgage rates.


That tells me, only 1 out of 3 homes might be sold for purposes of rates rising too quickly. There's nearly 80 million homes in the US. 24 million represent the 1 out of 3 that aren't mortgage free or mortgage insulated (less than a 3% rate). By 2013 nearly 15 million homes had gone into foreclosure or received a loan-mod. through our last recession (2009-2013).


We are to believe that this price run up we've experienced over the last 5 years is going to pop. Slow, yes. But pop? No. Not even close. Past blog/newsletters have spoken to the lack of new home construction (about 5 million short of demand). 


Bottom line is that this Pundit (credentialed out) says, home prices will rise for at least the next two years. I think we'll see 15% home price increases (in total) in the next 2-3 years. Remember the supply chain issues will increase pricing too, along with labor shortages. Those Ivory Tower Pundits don't see what it's like in the trenches and rely on back-testing data. Try predicting the future, not testing the past. Home Prices are heading higher in the hot job market areas of the country. That's not to say that country-folk in the boonies won't suffer - they almost always do. But Single Family (not condos) housing will continue to crush it through 2024 on price alone (HIGHER).

Posted by Andrew Walter May CEO on June 28th, 2022 9:46 AM

Another great month and another great year. Why? Simple. We offer better rates, faster and superior service. What's superior? A team that is made up of Mortgage Loan Officers that have experience, are educated and tested. Why risk your biggest asset to a bank 18 year old? That's all it takes to start talking the talk - 18 years old. No test, no education, no experience required by NMLS, CFPB, etc. Go to where the knowledge is. Call ADRMortgage.com 919 771 3379 and reach one of our seasoned/educated professionals. We'll know the park out of the ball compared to banks (yes, I meant to say that). www.adrmortgage.com

Posted by Andrew Walter May CEO on June 15th, 2022 4:35 PM

As everyone knows rates have pretty much doubled in the last 6 months to a normal range in the low 5s. We expect rates to continue into the 8s over the next 6 months. What this means is we are unlikely to see the over-bidding of the past (white-hot prices). However, that hasn't slowed down as of May 2022. We're seeing a lot of clients over-bid. What is over-bidding? Well, it's paying more today than it's worth for your home. Appraisals are starting to come in way-under purchase prices in some instances. Some people don't mind that, as it can be frustrating spending years looking for a home. In fact, if it does take you a year you are likely to be over-bidding anyway since home price appreciation was 25% last year and is likely to be 10+% in 2022. Therefore, over-bidding is a time oriented situation. No one wants to pay more for something, but when it comes to your home the facts are friendly. People will always over-bid to get the home of their dreams. What can you do about it? Answer:

Make your Realtor work harder!

Realtors are your eyes and ears for bidding on a home. I once put in 3 offers in one day. Unheard of? No. I qualified to buy all 3 and therefore, it was fine. We purchased the home that we wanted and it worked out. Make sure you speak with a licensed mortgage loan officer about over-bidding. What's your back up plan if you find you've overbid? Your bank only has a requirement to hire an 18 year old. Don't fall victim to believing what someone says who has never purchased a home before. Get a licensed professional that you trust involved in what will likely be the largest financial transaction of your life. 


We treat you with respect and operate in Florida, Virginia and North Carolina. If you are looking for an honest, hard-working mortgage company that doesn't take advantage of the rate situation please give us a call. 919 771 3379. Thank you. Andy May 

Posted by Andrew Walter May CEO on May 4th, 2022 10:26 AM

Baseline Conforming Loan Limit Will Increase to $647,200

FOR IMMEDIATE RELEASE
11/30/2021

Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced the conforming loan limits (CLLs) for mortgages to be acquired by Fannie Mae and Freddie Mac (the Enterprises) in 2022. In most of the U.S., the 2022 CLL for one-unit properties will be $647,200, an increase of $98,950 from $548,250 in 2021. 


$647,200 is basically the max loan size; high cost areas going well into the $800,000+ range.

Contact ADRMortgage.com - 919 771 3379 Andy May

Posted by Andrew Walter May CEO on March 22nd, 2022 4:11 PM

ADR was founded by Andy May in Florida in 2005 and later re-domesticated in North Carolina. Currently, ADRMortgage.com is licensed in Florida (#MBR4850), North Carolina (#B-148020) and Virginia (#MC-3809). NMLS # for Andy May Group, LLC (ADRMortgage.com) is #88010. MLO #s can be found at https://nmlsconsumeraccess.org/

Contact Andy May at 919 771 3379 for more information. ADR brings it's wealth of products and services back to Florida. We are happy to re-enter the market and look forward to serving Floridians! 

Posted by Andrew Walter May CEO on February 7th, 2022 10:55 AM

It's a great way to pay yourself more. Why not refinance? We saved one client $24,000 a year in payments on a $500k loan. How much will you save? Rates (this is not an offer) were as low as 2.25% on a 30 year fixed with an APR of 2.5%.  Yes, all of you that received that rate - you are WELCOME! Now rates are running around 2.875% on a 30 year fixed with a 3.125% APR. In fact, we did our first over a million dollar loan in a while and the rate was 2.875% with an APR of 3.125% for a 30 year fixed.

Rates change all the time so check in with us for a quick, easy and free rate quote. We may not be the biggest lender but we are the best at low low rates. And we have a super smart staff that will take care of you through the process. Look forward to hearing from you at www.adrmortgage.com. Select which mortgage loan officer you wish to work with and we'll exceed your expectations. Thank you. Andy May - Founder and Owner

Posted by Andrew Walter May CEO on November 2nd, 2021 8:51 AM

With rates volatile this week, it proves that you need your loan app into adrmortgage.com and ready to go. Savvy clients know that the market changes every hour. This week we saw rates touch back down near all-time lows (below 2.5% on a 30 year fixed). They've since gone back up by about .25%.

Why does it matter to get the loan application on a refinance in quickly? Simple answer: To catch rates when they hit your number. We can hold the application and wait until you like the rate. This doesn't work everytime - but it gets you closer to an ideal rate. Think about when the stock market falls. Rates generally come down. When that happens, if you have a full loan application waiting in our queue - we can rate lock you and you get the rate you want.

If you have to go through the application process, it can take several hours to a full day. At that point, like this week, rates can easily bounce back and you miss the window. If you are thinking about refinancing, find the company you trust - and put in an application with a reasonable rate that you may be able to obtain. We spoke with a past client this week that was at 3% on a 30 year fixed. We were able to get him 2.5% and save him $1200 a year. It's a smaller loan balance, but that is how to get the rate you want. Be prepared. Be Ready. And work with someone you trust.

Andy May 919 771 3379. www.adrmortgage.com MLO 103418; NMLS 88010. 8522 Six Forks Road, Suite 201, Raleigh NC 27615. consumeraccess.org for a history of the company and loan officers. 

Posted by Andrew Walter May CEO on July 22nd, 2021 11:15 AM

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