Author: Premela R.

With the recent addition of two new America Mortgages’ Non-Resident mortgage programs, a reduction in current interest rates, and owner-occupied borrowers still sitting on the side-lines, 2024 is poised to be the best year for U.S. real estate investing. According to Fitch Ratings, home prices are expected to rise by at least 2-4% in 2024. The anticipated 75 basis points interest rate cut by the Federal Reserve in 2024 is poised to boost the real estate market, creating an opportunity to buy now before the craziness begins.

As we enter 2024, the U.S. real estate market is undergoing a notable shift, echoing sentiments consistently emphasized by America Mortgages in recent months. Redfin’s Senior Economist Elijah de la Campa observes, “Mortgage rates are coming down, more people are listing homes for sale, and there are still plenty of side-lined buyers ready to take advantage of fresh inventory.” The expected drop in mortgage rates and an increase in housing inventory present compelling opportunities for investors, reinforcing the optimistic outlook for the real estate market in 2024.

As a company, we love to quote successful real estate investor Barbara Corcoran. In a recent article in Yahoo Finance, Barbara predicts “housing prices are going to go through the roof.” She goes on to state, “The minute those interest rates come down, all hell’s going to break loose, and the prices are going to go through the roof,” she said. “[Right now sellers are] staying put. But they’re not going to stay put if interest rates go down by two points. “It’s going to be a signal for everybody to come back out and buy like crazy, and the house prices [will likely] go up by 20%,” she said. “We could have COVID [market] all over again.”

Zillow recently ranked 2,000 zip codes by the highest projected home price increases. 

The key findings:

• Miami and Knoxville homes have the most promise. While Rio Grande City, TX (78582) has the highest projected home value increase at 12.3%, Knoxville and Miami neighborhoods claim four of the top 10 spots. In Knoxville, home values may grow by 9.5% in the 37920 neighborhood and 8.3% in the 37918 neighborhood. Home values in the 33161 neighborhood in North Miami are projected to grow 8.8% by summer 2024 and by 8.5% in the 33162 neighborhood of North Miami Beach.

• About 80% of the top 50 projected home price increases are in the South. This includes Winston-Salem, NC (27105, 8.7%; 27107, 7.3%); Athens, GA (30605, 7.9%; 30606, 7.7%); Myrtle Beach, SC (29588, 7.8%); Savannah, GA (31419, 7.8%); and Charlotte, NC (28208, 7.5%).

• These NYC neighborhoods are projected to grow by 7% or more by next summer. Fort George (10040), Jamaica (11434), and Washington Heights (10032) are poised to have the highest growing home values in all of New York City. 

• These neighborhoods have the highest projected home value growth in these major cities. In Chicago, the 60623 neighborhood is projected to see home values grow 4.9% by next summer. In Phoenix, the 85009 area is projected to see a home value growth of 6.9% by the same time next year. But, in San Francisco, the 94121 area is projected to see 1.7% growth. Some of the lowest home value growth projections are in San Francisco.

• Home prices are projected to grow by $100,000 in this San Diego neighborhood. In Carmel Valley – 92130 – the projected 5.3% growth on the current $1.85 million home value would lead to a $98,382 average price increase. Other CA places with the largest price increases include 90275 in Rancho Palos Verdes ($92,403), 92024 in Encinitas ($80,541), 92705 in North Tustin ($77,510), and 93117 in Goleta ($75,213).

Projected Home Value Increases by Summer 2024

According to Zillow, cities are listed in order of the highest projected home value increases between July 31, 2023, and July 31, 2024.

As your partner in real estate, America Mortgages is committed to guiding you through these opportunities. 100% of our clients are non-U.S. residents buying or refinancing U.S. real estate. This is all that we do, and no one does it better. 

With up to 75% LTV in all 50 U.S. states for a Foreign National and 80% for a U.S. expat, America Mortgages is your “go-to” source for reliable, flexible, market rate U.S. mortgage loans.

If you have any specific inquiries or require personalized guidance, our dedicated team at America Mortgages is ready to assist you throughout your real estate investment journey. Contact us at [email protected]. If you wish to arrange a commitment-free meeting with one of our U.S. loan officers to explore U.S. mortgage options, here’s our 24/7 calendar link. Wishing you a year filled with thrilling opportunities and prosperous ventures in the ever-evolving U.S. real estate market!

Between 2022-2023, the U.S. hosted over 1,000,000 international students, +12% from the previous year, the fastest growth rate in more than 40 years! (Open Doors® 2023 Report on International Educational Exchange, Nov 13)

Let me repeat this…

The U.S. saw a 40-year high growth rate in international students attending U.S. universities between 2022-2023!

What was also interesting was Singapore (our headquarters) and India saw record numbers of students attending U.S. colleges. 

Did you know…

We created the world’s first U.S. mortgage, which allows your child to be the tenant, AM Student+ Loan Details.

Education

From our client surveys, Education was given as a key reason for their U.S. real estate investments. 

Most of the time, the objective of owning real estate to earn income almost always comes down to “could I live there one day”? 

A popular strategy for our clients is to purchase an investment property “in anticipation” of sending their child to college, set up a base in that city, and earn rental income along the way.  

Then upon college acceptance, the parents can live in the property when visiting and rent it out when it’s not in use. 

Upon graduation, the price appreciation may even pay for college if they decide to sell. 

Another popular option, if the child stays in the U.S. for work, is to transfer the property to the child’s name as a “graduation gift” to help build up their credit profile and/or earn rental income. Why high schools? 

Here are the following “Education-related” reports – there is plenty of good information here – including the best Public and Private high schools in California, Texas, Florida, and New York:

1. Top U.S. High Schools Property Investment Guide eBook

2. Buyers Guide to California – Education drives prices and rents

3. Buyers Guide to California – Demographics

Here is a list of our partners that can help with your U.S. real estate investment decision:

• U.S. realtor introductions
• U.S. tax planning
• International funds transfer
• U.S. property insurance
• U.S. property management services

If you have any questions, please feel free to reach out to me directly at [email protected] or connect with us today for a no-obligation consultation with one of our globally based U.S. mortgage loan officers; simply use this 24/7 calendar link.

www.americamortgages.com

Is it a good idea to invest in U.S. rental properties now? We see this question come up time and time again in today’s economy. What is our answer…

Embrace Economic Decline!

Economic Decline and The Resilience of U.S. Real Estate:

Economic conditions can change unexpectedly, but one constant remains – the lasting value of U.S. real estate as a safe investment. Even when the world economy is uncertain, investors from all over have found a way to build wealth through U.S. real estate. Unlike other investments, real estate doesn’t just weather storms; it remains robust. The market’s stability and its ability to retain and appreciate value make it a dependable choice for investors looking for long-term financial success.

The Case-Shiller U.S. National Home Price Index shows that the U.S. real estate market has recovered from previous recessions, and home prices have continued to appreciate over time:

This resilience makes U.S. real estate a popular choice for investors seeking long-term financial success.

Diversification and Asset Protection:

When you invest in U.S. real estate, you’re not putting your money into one basket; you’re broadening your horizons. This diversification isn’t just about numbers; it’s about safeguarding your assets. U.S. real estate provides a solid foundation for your wealth against the unpredictable tides of economic change. “Given the global geopolitical landscape, our clients tell us that the U.S. offers a safe haven for real estate investments,” says Donald Klip, Co-Founder of America Mortgages.

Financing Options and Strategies:

During economic declines, interest rates often decrease, making financing more affordable. Our previous articles discussed how the Federal Reserve may lower interest rates during economic downturns to stimulate and boost the economy. While lower interest rates may seem enticing, it’s important to understand that they also trigger increased competition among homebuyers, leading to a buying frenzy. America Mortgages offers financing solutions tailored for expats and foreign nationals, including 30-year and 40-year fixed programs, providing flexibility to suit your financial goals. 

One strategy that savvy investors often employ in U.S. real estate is strategically generating rental income to cover mortgage payments. The rent collected covers mortgage payments, offsetting ownership costs and contributing to long-term wealth. To achieve high rental yield, investors usually look for cities with rent potential. Factors such as population growth, job opportunities, and affordability are essential in city selection. Cities like Atlanta, Dallas, and Houston have consistently attracted real estate investors, offering a balanced rental demand and supply equation contributing to stable rental yields. To find out the hottest rental markets in the U.S. in 2023, read here. 

It isn’t just about securing a property; it’s about strategically generating rental income to cover mortgage payments, ensuring a stable financial foundation.

Supply and Demand | The Lack of Available Housing in Today’s Market:

According to a recent article from CNN Business, The United States is not building enough homes to account for the number of people setting up their own households. As a result, there is a sizable shortage of new homes after more than a decade of underbuilding relative to population growth, according to a new analysis from Realtor.com released on Wednesday. The gap between single-family housing starts and household formations grew from 5.5 million at the end of 2021 to 6.5 million at the end of 2022 as household formations rose and single-family home construction dropped. This trend of underbuildings can be seen in vacancy rates, both for homeowners and rentals.

Key Insights

• Out of 149 metro areas across the United States, 24 are currently experiencing a housing shortage.

• Cities in southern states – like Charlotte, North Carolina, Austin, Texas, and Charleston, South Carolina – are the most represented among the top 20 cities with a housing shortage.

• The cost of living in cities like Los Angeles, California, New York, New York, and Boston, Massachusetts, may contribute to a housing surplus.

• Houston, Texas, Detroit, Michigan, and Minneapolis, Minnesota, are included in the top 20 cities with the biggest housing surplus despite relatively low costs of living.

Partnering with America Mortgages:

Entering the U.S. real estate market might feel like navigating uncharted waters, but don’t worry – America Mortgages is here as your guide. Foreign investors often face unique challenges, but with America Mortgages’ team of mortgage experts, you’re not alone. Our AM concierge service goes beyond guidance; it’s your compass, assisting in property management and unravelling the complexities of the U.S. real estate landscape.

Conclusion:

We believe the U.S. real estate housing market is poised at a crucial juncture as we approach 2024. While uncertainties abound, being informed and staying updated on market trends can significantly aid in making sound investment decisions. Whether you’re a first-time homebuyer or a seasoned investor, understanding the housing market predictions can provide a clearer picture as you plan your next move.

“If somebody offers you an amazing opportunity, but you are not sure you can do it, say yes – then learn how to do it later.” – Richard Branson

Creating a profitable real estate portfolio is easy when you have the proper guidance, and America Mortgages can provide you with just that. It’s not just an investment; it’s a journey to a better financial future. Take the leap and let America Mortgages navigate you to long-term financial success. Connect with us today for a no-obligation consultation with one of our globally based U.S. mortgage loan officers; simply use this 24/7 calendar link.

www.americamortgages.com

How to invest in U.S. real estate like a Wall Street Investment Bank with America Mortgages

Goldman Sachs, Blackrock, JP Morgan, Vanguard, Fidelity – There are new players in the U.S. real estate game — multibillion-dollar Wall Street hedge funds and cash-flush investors — buying up properties and pushing regular homebuyers out of the market with aggressive buying and rental tactics. Investors and hedge funds currently own roughly 80,000 single-family homes in the Las Vegas area alone, which is about 14% of the county’s housing stock of 563,000, according to Shawn McCoy, director of UNLV’s Lied Center for Real Estate. Some prime targets that are appealing to these investors are growing Sunbelt cities like Las Vegas and Phoenix and other secondary markets such as Charlotte, North Carolina, Atlanta, and various cities in Florida.

“From mid-2020, when interest rates started going up, hedge funds bought up a ton of properties and immediately turned them into rentals, pricing out local buyers,” says industry experts. “Now a big portion of our homes are owned by investors.” Institutional investors may control 40% of U.S. single-family rental homes by 2030, according to MetLife Investment Management. 

These funds pay top dollar to some of the smartest and brightest analysts in the world before spending billions of dollars. This should be a sign for all real estate investors to research, learn, and follow. Currently, investors target single-family “starter homes” below the median home sale price of $447,435, sometimes renting out to the same demographic they outbid for the properties, which further tightens supply and increases rental yield.

The reason for the specific areas targeted is that prices in some Sun Belt markets have outpaced national figures for rent inflation, according to research compiled by Zumper. Between January 2020 and January 2023, rents for a two-bed detached home increased about 44% in Tampa, Florida, 43% in Phoenix, and 35% near Atlanta. That’s compared with a 24% increase nationwide.

The realm of real estate investment is perpetually influenced by various economic factors, among which interest rates wield a substantial impact. Contrary to conventional wisdom, sophisticated investors often perceive high-interest rate periods as opportune moments to delve into the U.S. real estate market. This seemingly counterintuitive strategy is rooted in several compelling reasons that highlight the advantages and potential opportunities for astute investors.

1. Enhanced Bargaining Power

During high-interest rate environments, the housing market commonly experiences a slowdown. As a result, property sellers might be more amenable to negotiations, leading to a potential reduction in property prices. Sophisticated investors with the financial acumen and liquidity or access to high LTV mortgage lending (more than 65%) can capitalize on these conditions to acquire real estate assets at lower costs compared to periods of lower interest rates.

2. Favorable Cap Rates

High-interest rate environments often translate to higher capitalization rates (cap rates) for real estate investments. Properties with higher cap rates tend to generate more substantial income relative to the property’s cost. This can be especially appealing to sophisticated investors seeking income-generating assets, such as rental properties or commercial real estate, as they can yield greater returns on their investment.

3. Hedging Against Inflation

Real estate has historically served as a hedge against inflation. When interest rates are high, inflation is often a concern. Real assets like real estate tend to retain or increase their value over time, thereby shielding investors from the erosive effects of inflation. Experienced investors understand the value of having tangible assets in their portfolio that can safeguard against inflationary pressures.

4. Long-Term Investment Perspective

Many investors in real estate often adopt a long-term view. While high interest rates might seem daunting in the short term, they can take advantage of locking in fixed-rate loans, thereby securing a consistent interest rate over an extended period. This stability safeguards against potential future rate hikes and provides a reliable cost structure for the investment’s lifetime.

5. Risk Mitigation and Diversification

Diversification is a key principle in investment strategy. High interest rate periods may deter other forms of investment, making real estate a comparatively safer harbor. Investors who have been in the market for a while recognize the importance of diversifying their portfolio to mitigate risk, and real estate, particularly during high-interest rate climates, can be an integral component in a well-balanced investment strategy.

6. Other People’s Money, aka Leverage

Having access to leverage makes sense in every way – Capital efficiency, Tax benefits, Risk management, and Preservation of liquidity. As a Foreign National or U.S. Expat with America Mortgages, you can access bank leverage with LTVs up to 80%, even without U.S. credit. Qualify based on the property’s rental income, making the process easier and more accessible. It’s smart underwriting, as these properties should be treated as a pure commercial transaction. 

7. Buy now and refinance later

In a well-balanced investment strategy, investors will go into a higher investment environment with the concept of “buy now and refinance later.” Global real estate investors recognize the unique flexibility of U.S. mortgages. Whether you’re 19 or 99 years old, you can secure a 30-year or 40-year amortization, making financing options readily available.

It’s a buyer’s market, as many novice real estate investors and owner-occupied buyers are sitting on the sideline waiting for interest rates to go down. What will that likely mean? Rates decrease, inventory is limited, buying power increases = FOMO (fear of missing out) – real estate prices will increase and increase quickly. 

Final Thoughts

In essence, while high-interest rate periods might initially appear as a deterrent to real estate investment, sophisticated investors perceive these periods as windows of opportunity. Their ability to leverage market conditions, negotiate favorable deals, capitalize on higher cap rates, hedge against inflation, and adopt a long-term perspective with high LTV leverage distinguishes them in the real estate investment landscape. 

Ultimately, the allure of U.S. real estate for experienced investors during high-interest rate periods lies in their capability to recognize and harness the unique advantages and opportunities that such environments offer. By employing smart financial strategies and seeing beyond short-term challenges, these investors position themselves to reap long-term rewards in the ever-evolving world of real estate investment.

Why does Wall Street want to buy your house? Now you know why!

We Understand Foreign National and U.S. Expat Mortgages Better Than Anyone

As a company, 100% of America Mortgages’ clients are living and working abroad while obtaining a U.S. mortgage loan. This is all we do, and no one does it better. “Would you take your Porsche to a Mazda dealership to get your car fixed?” states Robert Chadwick, CEO of America Mortgages. “Then why would you take a purchase 10x more to a broker or bank that doesn’t understand the complexities of non-resident lending?” 

America Mortgages is the leading expert in U.S. mortgage lending. For a no-obligation consultation with one of our globally based U.S. mortgage loan officers, please use this 24/7 calendar link. With U.S. loan officers in 12 countries, we work in your time zone and in your language.