Just as the Dow Jones Industrial Average is hovering around another all-time high, U.S. housing stock reached its own pinnacle in 2016 – $29.6 trillion dollars, according to Zillow’s year-end home value analysis.
While $30 trillion dollars may be a tough figure to imagine, Zillow’s report also points out the more relatable fact that the housing market has regained all the value it lost between 2006 and 2012.
Financial planners and stock watchers caution not to get too excited about the Dow hitting 20,000, because it only encompasses 30 companies and there are many more moving parts to the big economic picture.
Mortgage and real estate professionals have their own industry-centric optimism and caution to share in addition to the overall U.S. housing market recovery documented by Zillow: Home values rose 5.7 percent in 2016, but mortgage interest rates are also ‘upwardly mobile,’ with more increases expected.
If you’ve got mixed feelings about how to prospect and advise in a year where the cliché of “historically low interest rates” is no longer an option, you’re not alone.
Noted housing economist, Yale professor and Nobel laureate Robert Shiller was ambiguous in a Bloomberg interview, saying, “There might be a Trump boom coming. I’m not forecasting a boom. I find it very hard to forecast at this point in our history because it’s such an important change in government and we just don’t know where it’s going. I don’t know how people react to rising mortgage rates. This thing could feed a boom. I’m not saying it will.”
It doesn’t take Ivy League credentials to get back to basics when moving into uncharted market territory. mortgage loan officers and their Realtor® partners need to remind customers that homeownership is the way most Americans build worth and wealth.
Renters who haven’t taken the plunge due to fear, lack of resources or aversion to commitment need to understand that a sound, reasonable plan can be crafted to get them on the path to making their housing dollars work for them.
After all, rent does pay mortgages and property taxes — for someone else.
Agents and loan officers know that every consumer has a different situation. But the key to success and solid production in 2017 is reaching out consistently to referral partners and different market segments with current, relevant information that inspires them to find out what’s important and possible for them to do in this changing, cautiously optimistic market.
CEO and Founder of Total Expert Joe Welu contributed this article.