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Case Study: Access Home Equity for Future Liquidity

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Life happens — divorce, death, unexpected expenses. When it does, your clients need access to cash. And they shouldn't have to liquidate investments to get it.

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In this case study, I walk through how a HELOC gave a client access to capital without pulling a dollar out of their investments, or triggering a taxable event. Read the full case study here.

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Which clients need to explore this option? Send me an email, and we can build a custom scenario for each one.

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And now, the market.

What is the latest for September, and how does that impact real estate investments?

Fed Signals More Rate Hikes Possible

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Federal Reserve officials signaled this week that further rate increases may be needed to bring inflation back to the Fed's 2% target. Fed Governor Michael Barr noted that inflation risks have increased, while labor market risks have eased. New York Fed President John Williams and Philadelphia Fed President Anna Paulson also suggested another rate hike could be appropriate.

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The Fed just raised rates by 25 basis points at its September 16 meeting, and markets are now pricing in a higher likelihood of another hike at the October 27–28 meeting. Keep in mind the Fed Funds Rate affects overnight bank borrowing rates, not mortgage rates directly — though there's correlation over time.

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Here's the Bright Spot: New Home Sales Surge

New home sales rose 6.4% in August, hitting the highest pace of the year at 684,000 units annualized. This is above expectations and signals that buyers are still active, even as rates remain elevated.

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Important note: The median new home price declined, but that's primarily because more homes sold in the sub-$500K range. Broader data continues to show home price appreciation nationwide. In other words, prices aren't falling, the mix of homes sold just shifted.

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New Home Construction Cools

Housing starts fell 2.6% in August to an annual pace of 1.28 million homes — below expectations. Building permits also declined 2.7% to 1.39 million.

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Builders remain cautious. The National Association of Home Builders Housing Market Index fell to 32 in September, with higher rates, labor shortages, and elevated costs weighing on confidence.

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Here's the key: Housing demand still exceeds new construction supply. If rates decline and demand picks back up, limited inventory will continue supporting home prices.

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Pending Home Sales Tick Higher

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Pending home sales edged up 0.3% from July to August, though they're still down 4.7% year-over-year across all regions.

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Bottom line: Rates are weighing on activity, but buyers are still entering contracts. The market isn't stalling — it's just slower than last year.

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The Net-Net

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Rates have obviously continued to move. Home sales are still steady. Buyer demand is also steady, despite interest rates.

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If clients are looking to move, one thing I'm seeing right now is seller concessions towards closing costs. Locking in that strategy, even though rates are more elevated, could be a great move for your clients.

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For clients sitting on home equity, this is prime time for HELOCs. If you missed it, check out my case study above — it shows how a client accessed capital without liquidating investments.

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Are your clients asking about seller concessions? Thinking about HELOCs? I want to know what you're hearing. Send me an email at Leo@Anzoleaga.com.

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Very respectfully,
Leo Anzoleaga, CMPS®

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