The Big Plunge

November 08, 2023

THE BIG SPLASH

The Big Plunge

What you can’t miss today

Mortgage rates took a nosedive, marking the largest one-week drop in over a year, which nudged mortgage demand up for the first time in a month.

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  • The average interest rate for 30-year fixed-rate mortgages tumbled from 7.86% to 7.61%, sparking a 2.5% rise in total mortgage application volume.

  • Refinance applications inched up by 2% despite being 7% lower than the same period last year, as current rates hover around last year's figures.

  • Purchase applications also climbed by 3%, but were still 20% lower year-over-year, as the dip in rates hasn't fully countered the sting of high home prices and low supply.

  • The rate reduction was fueled by a dovish Federal Reserve, an update from the U.S. Treasury, and signs of a slowing job market.

  • With fewer economic events expected this week, the mortgage rate rollercoaster might take a brief pause after last week's dramatic plunge.

A SCOOP OF MARKET DATA

The number you should know

85%

Americans are so bummed about the housing market that it's coloring their view of the entire economy, according to a Fannie Mae survey.

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  • A whopping 85% of people think now is a terrible time to buy a house, thanks to sky-high prices and mortgage rates that would make your wallet weep.

  • The gloom doesn't stop at housing; 78% are convinced the economy is on a one-way train to Trouble Town, with inflation playing the villain.

  • Only 17% of the eternal optimists think mortgage rates might drop in the next year, while nearly half are bracing for them to climb even higher.

  • Homeowners are clinging to their low mortgage rates like a life raft, making them reluctant to sell and adding to the inventory squeeze.

  • Prices keep soaring to new heights, with the latest data showing home values hitting record numbers in August, leaving buyers with little hope for a bargain.

  • Despite some feeling peachy about job security and personal finances, the overall economic sentiment is as sour as month-old milk, with the highest 'wrong track' vibes since 2011.

A SCOOP OF INSIGHTS

Something you’ll learn

In a market where high interest rates are the new normal, savvy real-estate investor Matthew Tortoriello plays the game differently, securing a 5% interest rate through seller financing, while most people don't even know this option exists.

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  • Mortgage rates are sky-high, and Tortoriello isn't here for it. Instead of the average 7.26% rate, he's clinching deals at 5% by getting sellers to finance the purchases.

  • He recently snagged a medical office building for $1.9 million with a sweet 5% interest rate from the seller, which is way cooler than the bank's yawn-inducing 7%.

  • This isn't Tortoriello's first rodeo; he previously locked in rates as low as 2% when the market was at 5.7%. Talk about a financial Houdini!

  • Seller financing is like a secret handshake in the real estate world, not commonly known, but it's a nifty trick up the buyer's sleeve.

  • Most sellers aren't keen on playing banker due to the risks, but Tortoriello's got the charm and the smarts to make it work to his advantage.

  • His strategy? Look for properties with old or no loans and play up the tax benefits to the seller, because who doesn't love a good tax break?

  • The bottom line: Tortoriello's mix of motivation, negotiation, and a bit of financial wizardry gives him the edge in a market that's as forgiving as a concrete pillow.

A SCOOP OF CONTROVERSY

Everyone will talk about it

In a twist that sounds like it's straight out of a soap opera, pop icon Katy Perry has been given the green light to purchase a swanky $15 million Montecito mansion from the founder of 1-800-Flowers, despite his claims of being under the influence of painkillers during the sale.

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  • Katy Perry can now proceed with buying a lush $15 million estate from 1-800-Flowers' founder after a judge dismissed the idea that painkillers clouded his judgment.

  • The legal scuffle showcased Perry against Carl Westcott, who claimed he wasn't in the right headspace when he agreed to sell the property.

  • The judge pointed out that Westcott made a cool $3.75 million profit from the deal and had entered into other contracts around the same time without contesting them.

  • Perry is also seeking an extra $1.4 million for rental income she missed out on due to the delayed sale, while Westcott's camp accuses her of a "pyrrhic victory" and taking advantage of the elderly.

  • The Montecito property, neighbored by stars like Oprah and Brad Pitt, was initially bought by Westcott for $11.25 million and contracted to Perry for $15 million shortly after.

  • Westcott's change of heart was attributed to painkiller effects post-surgery and his deteriorating health, including early signs of dementia and Huntington’s disease tremors.

  • This isn't Perry's first real estate rodeo gone wrong; she previously faced opposition from nuns when purchasing a Los Angeles convent.

How was today's shake?

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