New Year Could Be Great Time to Buy, or Sell, a Home

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The coming year could be a great time to buy or sell a house, according to the 2025 Housing Forecast by Realtor.com.

According to the prediction, reported by HouseBeautiful.com, property prices are set to grow by 3.7% and mortgage rates are to remain relatively steady at 6.3%, "but prospective home buyers can also expect to see an 11.7% increased inventory" of existing homes.

Realtor.com said the major wild card in it all is U.S. President-Elect Donald Trump, who has plans to "unnecessary" regulations and make more federal lands available to build homes one.

Danielle Hale, chief economist at Realtor.com, called the phenomenon the "Trump bump."

"The size and direction of a Trump bump will depend on what campaign proposals ultimately become policy and when," Hale said. "For now, we expect a gradual improvement in housing market dynamics powered by broader economic factors. The new administration's policies have the potential to enhance or hamper the housing recovery, and the details will matter."

Buying, Selling to Increase in New Year

Realtor.com Senior Economist Ralph McLaughlin said both buying and selling are projected to be on the rise in the new year.

"Buyers should take advantage of higher inventory levels, slower moving homes, and a higher share of price cuts by taking their time to do their due diligence," McLaughlin said. "Find a home that best meets their needs and ask for concessions from sellers."

According to MansionGlobal.com's Casey Farmer, in addition to the increase in inventory of existing homes, single-family home starts are expected to grow by 13.8%, an amount not seen since 2006.

"This will bring inventory to the highest level since December 2019 — 'the first balanced market in nine years,'" Farmer quoted from the Realtor.com report.

BankRate reported on December 16 that mortgage rates "sunk across the board compared to a week ago," with rates for 30-year fixed, 15-year fixed, 5/1 ARMs, and jumbo loans all dropping.

"Despite falling in August and September, mortgage rates have since regained ground and remain higher than they were just a few years ago," BankRate's Andrew Dehan wrote "That's closer to the historical norm of about 7.2%, but still much higher than what borrowers became accustomed to in the last decade."

However, CNBC's Diana Olick reported on Wednesday that after rising last week, mortgage rates have been flat to start the new week, according to a survey by Mortgage News Daily, as the market waits to see if the Federal Reserve will cut rates again.

"Markets know the Fed will cut and that the dot plot (aka rate outlook survey that's updated four times per year and closely watched by bonds) will show a higher rate trajectory than September," Mortgage News Daily Chief Operating Officer Matthew Graham, according to Olick. "What we don't know is how gloomy of a dot plot or how hawkish of a Powell the market is will to accept."

If Realtor.com's forecasts prove reliable, and the "Trump bump" and the Fed's actions push the market forward as well, there are several options for getting into the market.

Rocket Companies Inc.

Rocket Companies Inc. (RKT:NYSE), a pioneer of the online mortgage industry, was second in the industry in 2023 for a number of loan originations, the Motley Fool reported.

In 2023, the Detroit-based lender originated more than 288,000 mortgages worth US$76.3 billion, the site said.

In addition, the company has been ranked number one in customer satisfaction in America by J.D. Power for a decade. The rankings are based on client feedback by the independent research firm.

"In the past year, Rocket has significantly expanded its use of artificial intelligence (AI), building it into every aspect of the homeownership journey," the company said in a release about the ranking. "Focusing on AI is already benefiting both Rocket's servicing team and clients, resulting in first call resolutions of more than 60% and creating stronger relationships between the company and its clients."

Nerd Wallet currently has a 4.5 out of 5 score for Rocket Mortgage. "Rocket Mortgage is the largest mortgage lender by volume," the website said. "It stands out for its range of affordable borrowing options, including a loan with a minimum down payment of 1%, as well as paths to down payment assistance and closing cost credits. Most likely to appeal to borrowers who prioritize a seamless digital experience or plan on making a small down payment."

According to TipRanks, out of 10 analysts rating the stock in the last three months, six rated it Hold, and four rated it Sell, with an average price target of US$14.40 per share.

The company said it generated total revenue of US$647 million and adjusted revenue of US$1.3 billion in Q3 2024, exceeding the high end of its guidance range, and delivered Q3 2024 adjusted EBITDA of U$286 million, the highest in two years.

Reuters reported that management and insiders own 7% of the company, and institutions own 71%. The rest is retail.

Top shareholders include The Vanguard Group Inc. with 8.27%, Fidelity Management & Research Co. with 4.97%, Boston Partners with 6.5%, JP Morgan Asset Management with 5.4%, and Nuveen LLC with 3.64%.

It has 1.99 billion shares outstanding, with 134.91 million of them free-float traded shares. Its market cap is US$24.2 billion, and it trades in a 52-week range of US$10.87 and US$21.38.

Loan Depot Inc.

Loan Depot Inc. (LDI:NYSE), with more than 65,000 new loans in 2023 for US$21.5 billion, ranks 10th on the Motley Fool's list for home loan originations.

The second quarter's financial results released in November showed revenue of US$315 million for the company, up 18% YoY, and adjusted revenue of US$329 million, up 26% compared to 2023.

In June, the company's President and Chief Executive Officer Frank Martell earned Inman's 2024 "Best of Finance" award for the second year in a row. Inman is a news source that covers the industry. It was the second honor Inman was awarded by the outlet this year, following his recognition on its 2024 "Power Player" list.

TipRanks reported that one Wall Street analyst made a Sell recommendation on the stock with a US$2.70 per share price target, a 27.96% change from its price of US$2.11 at writing.

The company also has been noted for its attention to Hispanic and non-white mortgage applicants. In 2022, the company placed 37 agents on the National Association of Hispanic Real Estate Professionals list, the highest number of any company.

"We continue to advance the pillars of our Vision 2025 plan by serving today's increasingly diverse community of first-time homebuyers and creating new ways to develop a lifecycle relationship with our customers," said Martell.

According to Reuters, 19% of Loan Depot shares are held by management and insiders. CIO and Head Economist Jeff DerGuarahian has 6.43% and Jeff Walsh has 4.14%.

About 32% is with institutional investors. Cannell Capital LLC has 5.06%, The Vangaurd Group Inc. has 5.91%, Parthenon Capital Partners has 4.26%, Brandywine Global Investment Management has 2.29%, and Knightsbridge Wealth Management has 3.06%.

The rest is in retail.

Loan Depot has a market cap of US$696.51 million and 327 million shares outstanding. It trades in a 52-week range of US$1.52 and US$3.71.

Bank of America Corp.

In addition to being the nation's second-largest banking institution, Bank of America Corp. (BAC:NYSE) moved up from number six to number 3 on the Motley Fool's 2023 list with more than 91,000 loan originations for US$28.45 billion.

Its Community Affordable Loan Solution for properties in minority communities in several cities uses credit guidelines based on factors such as timely rent, utility bill, phone, and auto insurance payments and requires no mortgage insurance or minimum credit score. Individual eligibility is based on income and home location. Anyone from any race or ethnicity is welcome to apply, the bank said.

The bank said it has helped 36,000 people and families become homeowners through the program and provided more than $9.5 billion in low down payment loans and over US$350 million in non-repayable down payment and/or closing cost grants.

Yahoo! Finance rated the company 3.9 out of 5 stars for service, saying the financial giant offers a "big-bank menu of mortgages." Customers can get grants for down payment assistance and even allows some medical professionals to make lower down payments and exclude student loans from debt limits.

According to Reuters, about 63% of the company is held by institutions and about 10% by strategic entities, including insiders and management. The rest is retail.

Top shareholders include Warren Buffett's Berkshire Hathaway Inc. with 9.99%, The Vanguard Group with 8.56%, BlackRock Institutional Trust Co. with 4.21%, State Street Global Advisors (US) with 3.76%, and Fidelity Management & Research Co. with 2.11%.

The company's market cap is US$345.66 billion, with about 7.67 billion shares outstanding. It trades in a 52-week range of US$48.08 and US$31.27.

Beeline Loans Inc.

Digital mortgage lender Beeline Loans Inc. is increasing its engagement with young people and property investors who have been hesitant to buy property in recent years with a simplified online portal and A.I.-powered chatbot that connects with consumers and quickly evaluates their eligibility for loans. 

"Get a home loan from your sofa" and apply in less than 10 minutes, according to Beeline's website. "We remove the traditional loan BS and shorten the path to your financial happy place," the company said.

"It can be a power imbalance, where the 'little guy' can't access the same loans the tycoons use and can feel small up against the 500-pound mortgage lender who holds all the power — and the money," the company noted on its site. "So, we've opened it up to everyone, transforming a meandering home loan journey into a Beeline — using a combination of tech, old-fashioned warmth, and responsiveness."

In September, Beeline announced it had signed a merger agreement with public company Eastside Distilling Inc. (EAST:NASDAQ), which produces award-winning craft spirits in Portland, Oregon, and operates a digital can printing business.

The deal gives Eastside access to Beeline's end-to-end artificial intelligence (AI)-enhanced platform targeting millennials, Gen Z and so-called "gig workers." Beeline gains the opportunity to create shareholder liquidity and grow its asset value as mortgage rates are expected to fall.

"There is no doubt our team saw the opportunity to address the mortgage needs of a large emerging audience who grew up with mobile devices and the ability to obtain real-time certainty and transact any time of the day," Chief Executive Officer Nick Luizza said in a release updating on the merger last month. "Our platform, brand, and processes were designed for these generations, and many of the platforms out there are not consistently meeting the needs of Millennials and Gen Z.  We are excited to serve these important consumers in a more material way in 2025."

Beeline's chatbot, named Bob, is available 24 hours a day and is capable of answering complex questions and providing the customer with specific answers, as well as posing "highly personalized product-specific questions," a representative for the company said.

"We found that the traditional system of home lending included mountains of cluttered paperwork and constant back-and-forth between lenders and buyers, layered with confusion and intimidation," Beeline said in a FAQ in its media kit. "Beeline's main goal is to replace hassle with peace of mind and let users enjoy the freedom from a refi or the excitement of moving into their new home."

Hispanic customers are also a priority as a new version of its chatbot will instantly detect the language of the consumer and give faster more accurate answers.

Beeline offers a variety of options, including refinancing, to consumers through the digital platform. It has built its premise on making homeownership more accessible to a wider, more diverse market, making it an attractive prospect if mortgage rates continue to fall.

The company launched a proprietary front-end mortgage platform in 2020 and closed 1,500 mortgages by the end of 2021. Beeline said 2024 is expected to be its strongest year.  

Writing for Smart Asset, Chris Thompson reviewed the company and praised its "simple, easy-to-use online application process."

"As an online mortgage lender, everything Beeline Loans offers is accessible through your computer or smartphone," he wrote.

Robinhood revolutionized the stock-buying industry by fractionalizing stocks, and according to Thompson, "Beeline's calling card is its speedy application process."

Robinhood allowed people who previously were excluded from the stock market to enter the industry and paved the way for those people who may have been excluded to get involved. Beeline is now doing for mortgages what Robinhood did for the stock market, and it's powered by AI.

Beeline Loans reports that its largest shareholder is founder and CEO Liuzza. According to Beeline, the company has raised US$46 million to date through the sale of equity.