Bad News is Good News? What the Government Shutdown Means
What Is a Government Shutdown — And Why It Happens
Here is the 30,000-foot view: when Congress can’t agree on funding the federal government (i.e. passing appropriations or continuing resolutions), many federal operations lose their legal authority to spend money. This triggers a “shutdown” of non-essential agencies until funding is restored.
More specifically:
The U.S. federal government’s fiscal year begins October 1. If appropriations bills (or stopgap funding bills) are not passed by then, there’s a lapse in funding.
Under the Anti-Deficiency Act, agencies can’t legally obligate or spend funds without that authorization.
Some parts of government are considered “essential” (defense, emergency services, etc.) and continue during a shutdown; many others are paused, shut down, furloughed, or operate at a reduced level.
In the current 2025 shutdown, it stems from disagreements between Republicans and Democrats over spending levels, health care subsidies, foreign aid, and priorities in the budget.
Government Shutdown 2025: What It Means for Homebuyers and Sellers
When Washington stalls, the ripple effects reach far beyond Capitol Hill — even into our local housing market. As of October 1, 2025, the federal government has shut down after lawmakers failed to agree on a budget. But what does this mean if you’re trying to buy, sell, or refinance a home right now? Let’s break it down.
Why the Government Shut Down
Every year, Congress is supposed to pass a budget to fund federal agencies. When they can’t reach a deal, money stops flowing to “non-essential” operations, causing what’s known as a government shutdown. Essential services like national defense and Social Security continue, but many other programs are delayed or paused until an agreement is reached.
How a Shutdown Affects Mortgages & Real Estate
A short shutdown (just a few days) may cause minor hiccups. But the longer it drags on, the more likely we’ll see real delays in the mortgage and housing markets. Here’s how it plays out:
Government-backed loans (FHA, VA, USDA)
These rely on federal staff. During past shutdowns, loan processing slowed significantly, and USDA loans were sometimes put on hold altogether.Flood Insurance (NFIP)
Homes in flood zones require coverage through the National Flood Insurance Program. If NFIP authorization lapses, new policies and renewals may be frozen — which can stop closings in their tracks.IRS & Income Verifications
Lenders often need tax transcripts from the IRS. If those systems go dark or staff are furloughed, income verification could slow down approvals.Economic Data & Market Volatility
Shutdowns also delay government reports on jobs and inflation. Without those, markets can get jittery — sometimes pushing mortgage rates down temporarily but making them unpredictable. Have these reports really been that accurate anyway?Closing Timelines
Even if your loan is conventional (not government-backed), the web of verifications means longer turn times and potential closing delays.
What Buyers Should Know
Expect Delays – Build extra time into your contract to avoid stress.
Check Your Loan Type – Conventional loans may move faster than FHA/VA/USDA during a shutdown.
Confirm Flood Insurance Early – Don’t wait until the last minute if the home is in a flood zone.
Stay Flexible on Rates – Shutdowns can cause rate swings; consider locking early if you see a favorable number.
Stay in Touch With Your Lender – Frequent updates and proactive planning will help you get to the finish line.
What Sellers Should Know
Vet Financing Carefully – Make sure your buyer is pre-approved and their loan program isn’t likely to be stalled by the shutdown.
Be Flexible on Closing Dates – Delays may be unavoidable, so prepare to grant extensions if needed.
Price Strategically – In uncertain times, overpricing can scare off hesitant buyers.
Don’t Panic – Deals may take longer, but most will still close.
Evergreen’s Action to Avoid Delays
4506T: EHL will temporarily suspend the requirement for IRS Tax or W-2 Transcripts to close a mortgage loan & completed 4506-T forms, signed at closing, will continue to be required.
Flood Insurance: In addition, current authorization for the National Flood Insurance Program (NFIP) expires at midnight on Tuesday, September 30, 2025. Unless an extension is authorized, as of September 30, 2025, the NFIP does not have the authority to issue new flood policies or renew existing ones.
Verification of Employment: For borrowers employed by the federal government where a VVOE cannot be obtained prior to closing, EHL may obtain the VVOE after closing, but prior to loan delivery to the investor. As a reminder, if the borrower is in the military, a military Leave and Earnings Statement (LES) dated within 30 days of closing is acceptable in lieu of a VVOE.
EHL will obtain tax transcripts on applicable loans when the federal government shutdown ends. Once tax transcripts are received, EHL will compare the income documents to the transcripts. Loans with discrepancies may be subject to requirements for the buyer to provide additional documentation.
The Big Picture
A government shutdown isn’t the end of the housing market — far from it. Homes will still be bought and sold. But the process may feel stickier, slower, and more unpredictable until Washington gets back on track.
Pro Tip: If you’re considering buying or selling during the shutdown, connect with a local mortgage professional (that’s me!) who can help you anticipate delays and adjust strategy. The more prepared you are, the smoother your path will be.
Let’s end on a positive. Here is the bond market today (10/1) - yield are UP which pushes mortgage rates down. Ever since the fed rate cut, mortgage rates have been ticking back up. Is this what stops the upward trend in rates? Is this all a ploy to force rates down by cutting government spending and reducing our debt deficit?
Only time will tell.
The Pros and Cons of Living in Bellingham, Washington
Thinking about making Bellingham your home? If you’ve Googled us, you’ve probably seen the photos of snow-capped Mount Baker, the sparkling bay, and our famously outdoorsy lifestyle. But what’s it actually like to live here day to day?
I’ve spent years living, working, and raising my family in Bellingham. I know the quirks, the highlights, and the challenges of this corner of the Pacific Northwest. Below, I’ll share the biggest pros and cons of calling Bellingham home—straight from a local’s point of view.
(Original inspiration for this post came from Aldo at LeVain Real Estate Team — worth checking out for another take!)
Pro #1: An Outdoor Playground
Bellingham is one of those rare places where you can ski in the morning, mountain bike in the afternoon, and end your day watching the sunset over the bay. From Mt. Baker’s legendary powder to endless hiking and biking trails, rivers, and lakes, the natural beauty here is unmatched.
Even if you’re not pitching a tent every weekend, simply being outside here feels special. The city keeps adding parks, pump tracks, and waterfront spaces—perfect for a Saturday picnic or a casual beer at one of the many family-friendly breweries.
Pro #2: The Perfect Location
We’re strategically tucked between Seattle and Vancouver, B.C. That means you get access to two world-class cities (and their airports, concerts, and pro sports) without having to actually live in the middle of the chaos.
Whistler, Leavenworth, or a Seahawks game? All doable in a day trip. Meanwhile, you still come home to quiet streets, fresh air, and bay views.
Pro #3: Community That Shows Up
Despite a population of around 100,000, Bellingham still feels like a small town. Local businesses thrive because residents genuinely support them. The Farmers Market, Downtown Sounds concerts, and summer festivals are proof that community is alive and well here.
Pro #4: Great Place for Families
Raising kids here feels almost old-school. Summers are warm but not too hot, winters rarely bring extreme cold, and kids spend more time outside than inside. Parents connect easily—whether at parks, schools, or yes, even at breweries.
Bonus Pro: Golf & Mountain Biking Heaven
Galbraith Mountain has put Bellingham on the map for world-class mountain biking. Add in several scenic golf courses with mountain views, and you’ve got two thriving recreational communities baked into the lifestyle here.
Con #1: The Winters Can Wear on You
Our summers are glorious, but the tradeoff is long, gray winters. The short days in January and February can feel endless if you’re coming from sunnier states. The drizzle is tolerable—it’s the lack of sunshine that gets to people.
Con #2: The Cost of Living is Rising
Housing is the biggest hurdle. With median home prices pushing past $800,000, affordability is tough, especially when you compare prices to average local incomes. Groceries and gas aren’t cheap either, so newcomers definitely feel the pinch.
Con #3: Growing Pains of a Bigger City
Like many fast-growing places, Bellingham has seen increases in homelessness, drug use, and petty crime in some areas—particularly downtown. Most neighborhoods still feel safe, but it’s a reality worth noting.
Con #4: Food Scene is a Work in Progress
We’ve got some fantastic breweries, solid pubs, and a few standout restaurants. But if you’re after a wide variety of authentic international cuisine or Michelin-level dining, the options are limited compared to Seattle, Portland, or Vancouver.
Pros & Cons Snapshot
Pros:
Incredible access to the outdoors
Perfectly placed between Seattle & Vancouver
Strong community support
Family-friendly vibe
World-class mountain biking & golf
Cons:
Long, gray winters
High cost of living
Visible homelessness in city center
Limited dining variety
Is Bellingham Right for You?
This city is an amazing fit if you’re a nature lover, a remote worker wanting balance, or a family looking for a slower pace with strong community roots.
On the flip side, if endless sunshine, big-city nightlife, or a robust public transit system are non-negotiables, Bellingham may be a harder adjustment.
Bottom Line: Bellingham is a rare mix of stunning scenery, active lifestyle, and small-town feel with growing-city amenities. For many, it’s exactly the balance they’ve been searching for.
Curious about the original version of this post? Check out Aldo’s blog here.
Do Fed Rate Cuts Lower Mortgage Rates? Not Always.
The Fed cut rates three times at the end of 2024 (September 18, November 7, and December 18). Mortgage rates fell into September, nudged higher through late November, and rose after the December cut—proving (again) that mortgage rates don’t move in lockstep with the Fed. They’re driven more by the 10-year Treasury, inflation expectations, term premium, MBS spreads, and what markets already priced in.
The Visuals
Chart 1 — Mortgage Rates vs. the Fed Funds Target (Aug 2024–Jan 2025)
Overlays weekly Freddie Mac PMMS 30-year fixed against the Fed funds target (upper bound) with markers on each cut.
Chart 2 — What Happened After Each Cut? (4-week average before vs. 4-week average after)
Quick bar chart showing the average PMMS change around each 2024 cut.
What the numbers say (4-week windows):
Sep 18 (-50 bp): mortgage rates fell ~19 bps on average in the following month.
Nov 7 (-25 bp): rates rose ~30 bps in the next four weeks.
Dec 18 (-25 bp): rates rose ~12 bps over the subsequent four weeks.
Source data: Freddie Mac PMMS weekly archive.
Why Mortgage Rates Didn’t Obey the Fed (and rarely do)
Markets move on expectations, not announcements.
By September, investors had largely priced in the first cut; mortgage rates had already drifted down into the 6.1%–6.4% range before the meeting. Freddie Mac’s own outlook noted most of the decline was “already baked in” before that first cut.Mortgage rates key off the 10-year Treasury + MBS spreads.
The 30-year fixed rate tends to track the 10-year yield (plus a spread) far more than the overnight Fed funds rate. When growth/inflation expectations or supply dynamics push the 10-year up (or widen MBS/primary-secondary spreads), mortgage rates can climb—even if the Fed is cutting. (See late-2024/early-2025 when post-election policy expectations and term premium put upward pressure on yields.)“Hawkish cuts” are a thing.
In December, the Fed cut but signaled a slower path of easing in 2025. Markets heard “fewer cuts ahead,” repriced yields higher, and mortgage rates popped into January. Multiple outlets documented that early-2025 rise despite the cuts.
What Happened Specifically in Late 2024?
Fed cuts: Sep 18, 2024 (-50 bps), Nov 7, 2024 (-25 bps), Dec 18, 2024 (-25 bps).
Mortgage rates (Freddie Mac PMMS):
September into early October: fell to ~6.09%–6.12%;
Late October through November: drifted up toward 6.8%;
Post-December cut: rose from 6.60%–6.72% in mid/late December to roughly 6.9%–7.0% by mid-January.
Translation: the “Fed cut = your 30-year fixed drops tomorrow” myth needs a gentle retirement party.
How to Understand this as a Consumer
Set the frame: “The Fed controls overnight money; mortgages price the next decade.”
Watch the right dashboard: Analyze the 10-year Treasury, core inflation, growth data, Treasury supply, and MBS spreads—not just the Fed statement.
Action beats prediction: Negotiate price and credits now; use temporary buydowns, permanent buydowns, and refi strategy to control total cost, not just today’s headline rate.
Local reality matters: Inventory, concessions, and acceptance of contingencies can easily outweigh 0.125%–0.250% in rate noise.
My Crystal Ball
Right now, buyers are landing some of the best deals we’ve seen in a while thanks to higher inventory and fewer active shoppers. But that dynamic won’t last forever. As we move into fall and winter—and the headlines start blaring “The Fed dropped rates”—expect buyers to re-enter the market in droves. That means competition will heat up quickly. Great news for sellers, but it could create real challenges for first-time buyers, those with tighter budgets, and anyone needing to sell before they buy.
If you are one of these buyers, don’t wait.
Sources
Fed cuts (official statements): Sep 18 (-50 bps), Nov 7 (-25 bps), Dec 18 (-25 bps). Federal Reserve+2Federal Reserve+2
Freddie Mac PMMS archive (weekly mortgage rates): 2024–2025 series used in charts. Freddie Mac
Freddie Mac Outlook (Nov 2024): declines largely priced in after first cut. Freddie Mac
Context on early-2025 rates rising despite cuts: Bankrate, MarketWatch. BankrateMarketWatch
How the Iran-Israel Conflict Could Impact U.S. Mortgage Rates
In today’s hyper-connected world, global events don’t stay overseas—they ripple across economies, industries, and yes, even your mortgage rate. One area drawing increased attention is the ongoing tension between Iran and Israel, and its potential implications on the U.S. housing market. You might not expect a regional conflict 6,000 miles away to influence your interest rate on a 30-year fixed loan, but here's why it matters—and what savvy buyers should be paying attention to.
Global Conflict = Market Uncertainty
First, a quick finance 101 refresher: mortgage rates are closely tied to the yield on 10-year U.S. Treasury bonds. When global investors get nervous (say, due to escalating conflict in the Middle East), they tend to move their money into safer assets like U.S. Treasuries. Increased demand pushes bond prices up and yields down—which typically puts downward pressure on mortgage rates.
In plain terms? In the short term, geopolitical unrest can lead to lower mortgage rates as investors seek safety.
But it’s not always that simple.
Inflation Pressure and Oil Shock Risk
The Iran-Israel conflict carries serious implications for the global oil market. Iran is one of the world’s major oil producers, and any disruption in the Persian Gulf can lead to spikes in oil prices. Higher oil prices = higher transportation and production costs = inflation.
And if inflation starts rising again?
The Federal Reserve could step in with more hawkish monetary policy—meaning interest rate hikes or a delay in planned cuts. That, in turn, can push mortgage rates higher, not lower.
So we’re caught in a bit of a push-pull scenario:
Flight to safety = lower rates
Inflation concerns = higher rates
The outcome depends on how deeply the conflict escalates and how the markets interpret those events.
Long-Term Uncertainty = Volatile Rates
Mortgage rates don’t like surprises. The more uncertainty in the global economy, the more volatility we see in mortgage pricing. In early stages of a conflict, we may see rates dip. But as time goes on and inflationary concerns or global trade implications mount, that trend can reverse quickly.
This is one reason we often say: Don’t try to time the market—time your life. If buying a home makes sense for your family and financial situation, it’s better to work with a local expert (hey there 👋) to secure the best option available rather than gambling on geopolitical events.
What This Means for Buyers and Homeowners
If you’re actively house hunting or considering a refinance, here’s what I recommend:
Stay informed but don’t panic. Rate swings tied to global events tend to be temporary.
Lock when it makes sense. Rates can move quickly during volatile times, and a well-timed lock can save thousands.
Consult with a pro. A trusted local lender (like yours truly) can help you read the tea leaves and make strategic moves based on your goals—not headlines.
Final Thoughts
The Iran-Israel conflict reminds us that the mortgage market is not just about homes and homebuyers—it's about oil, inflation, foreign policy, and investor sentiment too. We’re all more connected than ever. The good news? When you have someone in your corner who understands both the local market and the global chessboard, you can make confident, informed decisions—no matter what’s in the news.
If you’re curious about how the current global climate could impact your mortgage strategy, I’m here to help you navigate it with clarity and calm.
9 Key Indicators of the Mortgage Rate Market
In the ever-evolving landscape of mortgage lending, staying ahead requires more than just tracking interest rates. Bill Bodnar (who I follow religiously), a seasoned financial expert, emphasizes the importance of understanding key economic indicators to anticipate market shifts and guide clients effectively. Here's a breakdown of nine essential metrics every mortgage professional (or client) should monitor:
1. Federal Reserve Watch
What it is: The Federal Reserve (the Fed) is the U.S. central bank, responsible for promoting maximum employment and ensuring price stability. While it doesn't set mortgage rates directly, its policies significantly influence the broader interest rate environment.
Why it matters: The Fed's decisions on interest rates and its balance sheet operations can indirectly affect mortgage rates. Monitoring the Fed's communications, such as the Summary of Economic Projections (SEP) and Federal Open Market Committee (FOMC) press conferences, provides insights into future rate movements.
2. Core Personal Consumption Expenditures (Core PCE)
What it is: Core PCE measures consumer spending on goods and services, excluding food and energy prices. It's the Fed's preferred inflation gauge.
Why it matters: The Fed aims for a 2% Core PCE inflation rate. Persistent readings above this target may lead to higher interest rates, impacting mortgage affordability.
3. Consumer Price Index (CPI)
What it is: CPI tracks changes in the price level of a basket of consumer goods and services, including food and energy.
Why it matters: While more volatile than Core PCE, CPI provides a broader view of inflation trends. Significant increases can signal rising costs, influencing the Fed's policy decisions and, consequently, mortgage rates.
4. Gross Domestic Product (GDP)
What it is: GDP represents the total value of goods and services produced over a specific time period, reflecting the economy's health.
Why it matters: Strong GDP growth can lead to higher interest rates as the Fed attempts to prevent the economy from overheating. Conversely, weak GDP may prompt rate cuts to stimulate growth.
5. Unemployment Rate
What it is: This metric measures the percentage of the labor force that is jobless and actively seeking employment.
Why it matters: A low unemployment rate indicates a strong economy, which can lead to higher interest rates. High unemployment may result in rate cuts to encourage borrowing and investment.
6. Jobless Claims
What it is: Weekly reports on the number of individuals filing for unemployment benefits for the first time.
Why it matters: Rising jobless claims can signal a weakening labor market, potentially leading the Fed to lower interest rates to support the economy.
7. Retail Sales
What it is: Measures consumer spending in retail stores, an indicator of consumer confidence and economic health.
Why it matters: Strong retail sales suggest robust consumer spending, which can lead to higher interest rates to prevent inflation. Weak sales may prompt rate cuts to stimulate spending.
8. Oil Prices
What it is: The cost of crude oil, a significant input in the economy affecting transportation and production costs.
Why it matters: Rising oil prices can lead to higher inflation, influencing the Fed to increase interest rates. Lower oil prices may have the opposite effect.
9. Geopolitical Events
What it is: Global events such as wars, elections, or trade disputes that can impact economic stability.
Why it matters: Geopolitical uncertainties can lead to market volatility, affecting investor confidence and influencing interest rates.
Conclusion
By keeping a close eye on these indicators, mortgage professionals and/or clients can better anticipate market movements, provide informed advice to clients, and navigate the complexities of the lending environment with greater confidence.
What Impacts Mortgage Rates?
I get this question all the time — especially in a volatile market like we’re in right now:
“When will mortgage rates go down?”
And look, for anyone to answer that with 100% certainty, they’d probably need to be a billionaire institutional investor, the President of the United States and the Chair of the Federal Reserve… all rolled into one.
Okay — maybe that’s a little dramatic, but you get my point. It’s a complex question with a lot of moving parts.
That said, there are trends and key indicators we can watch (which I’ll break down below). But before we dive into the data, I want to give you a quick “Econ for Dummies – Dylan Style” refresher (no judgment — I got a C+ in college Econ myself).
Here’s the basic idea:
If mortgage rates drop, monthly payments become more affordable.
More affordability = more demand.
More demand = rising home prices and shrinking inventory.
So here’s my honest advice: Buy when it feels right for you. Trying to perfectly time the market is a game even the experts rarely win.
Focus on what you can control — your budget, your goals, and your timeline. The rest? That’s what I’m here to help you navigate.
What Impacts Mortgage Rates? Let’s Break It Down.
If you’ve been watching the housing market or you're thinking about buying or refinancing, you’ve probably noticed how often mortgage rates are mentioned — and how much they can change. One week they’re up, the next they’re down. So, what really impacts mortgage rates?
Let’s take the mystery out of it.
1. Inflation
Inflation is the biggest driver of mortgage rates. When inflation rises, the purchasing power of money goes down, and lenders demand higher interest rates to compensate. Why? Because they want to make sure the money they’re paid back in the future is worth as much as the money they lent out today.
Pro tip: If inflation starts to cool off, mortgage rates usually follow. If inflation spikes, rates tend to climb too.
2. The Federal Reserve
The Fed doesn’t directly set mortgage rates — but it does influence them. When the Fed raises or lowers its benchmark interest rate (the federal funds rate), it impacts short-term lending and borrowing. This can ripple into longer-term rates like mortgages.
For example: If the Fed raises rates to slow inflation, mortgage rates often trend upward. If they cut rates to stimulate the economy, mortgage rates may go down.
3. The Bond Market (Specifically, the 10-Year Treasury Yield)
Mortgage rates closely track the yield on the 10-year U.S. Treasury bond. When investors pour money into safer assets like Treasuries (often during economic uncertainty), the yield drops — and mortgage rates tend to drop, too. When confidence is high and investors pull out of bonds, yields go up — and so do rates.
4. The Health of the Economy
When the economy is strong, with low unemployment and rising wages, people tend to buy more homes. Increased demand can push rates higher. On the flip side, in a slowing economy, lenders may lower rates to attract borrowers.
5. Your Personal Financial Picture
While the above are market-wide influences, your individual mortgage rate depends on:
Your credit score
Your down payment
Loan amount and type (conforming, jumbo, FHA, etc.)
Debt-to-income ratio
Property type and occupancy
The stronger your overall profile, the lower your rate is likely to be.
Final Thoughts
Mortgage rates are like the weather — they’re always changing, and while you can’t control them, you can plan for them. Whether rates are up or down, there are always smart ways to approach home financing.
If you’re wondering where rates are heading or whether it’s a good time for you to buy or refinance, let’s chat. I’m always happy to take a look at your situation and help you navigate the current market.
Market Turmoil Amid Escalating Trade Tensions: A Weekly Recap (April 7–11, 2025)
This past week, global financial markets experienced heightened volatility due to escalating trade tensions and economic uncertainties. Here's a breakdown of the key developments:
Stock Market: Rollercoaster Ride Amid Tariff Turmoil
The U.S. stock market witnessed significant fluctuations
Early Week Decline: The S&P 500 approached bear market territory, falling nearly 19% from its February highs by April 7.
Midweek Rebound: On April 9, the S&P 500 surged 9.52%—its largest one-day gain since 2008—following President Trump's announcement of a 90-day pause on new tariffs, excluding those on China.
End-of-Week Volatility: Despite the rebound, markets remained unstable, with the S&P 500 closing at 5,363.36 on April 11, up 1.8% for the week but still down nearly 9% year-to-date.
Bond Market: Yields Surge Amid Inflation Fears
Bond markets also faced turbulence:
Yield Spike: The 10-year Treasury yield rose sharply, reaching 4.5% by April 9—the largest three-day increase since 1982.
Mortgage Rates Climb: Consequently, mortgage rates increased, with the average 30-year fixed rate hitting 7.1%, adding pressure to the housing market.
Tariff Impacts: Global Trade Tensions Escalate
Trade policies significantly influenced market dynamics:
U.S. Tariffs: President Trump imposed a baseline 10% tariff on most imports, with a staggering 145% on Chinese goods.
Retaliation: China responded with 125% tariffs on U.S. products, while Canada and Mexico implemented up to 25% tariffs on select U.S. goods.
Global Impact: These measures disrupted supply chains and dampened investor confidence, leading to significant market sell-offs worldwide.
Consumer Sentiment: Confidence Plummets
The University of Michigan's Consumer Sentiment Index dropped to 50.8 in April, its lowest since the COVID-19 pandemic, reflecting growing concerns over inflation and job security amid the trade war.
Looking Ahead
As trade negotiations continue and markets seek stability, investors should brace for ongoing volatility. Monitoring policy developments and economic indicators will be crucial in navigating the uncertain landscape ahead.
Washington State Conforming Loan Limits
This page includes the 2025 conforming loan limits for all Washington State counties, with some additional commentary about how and why these caps are set. Home loans that exceed the maximum amounts shown below are considered “jumbo” mortgages.
At a glance: The current single-family conforming loan limit for most counties in Washington State is $806,500 (an increase over the 2024 cap of $766,550). In the more expensive Seattle-area counties of King, Pierce, and Snohomish, the single-family loan limit has been increased to $1,037,300 for 2025.
2025 Conforming Loan Limits for Washington State
The table below shows conforming loan limits for all Washington counties, and for all four property types. Note: a “1-unit” property is a single-family home with one resident. The “2-unit” column applies to duplex-style properties with two separate residents, and so on. If you’re buying a single-family home or condo in Washington State, refer to the “1-unit” conforming loan limit column.
County Name 1 Unit 2 Units 3 Units 4 Units
ADAMS $806,500 $1,032,650 $1,248,150 $1,551,250
ASOTIN $806,500 $1,032,650 $1,248,150 $1,551,250
BENTON $806,500 $1,032,650 $1,248,150 $1,551,250
CHELAN $806,500 $1,032,650 $1,248,150 $1,551,250
CLALLAM $806,500 $1,032,650 $1,248,150 $1,551,250
CLARK $806,500 $1,032,650 $1,248,150 $1,551,250
COLUMBIA $806,500 $1,032,650 $1,248,150 $1,551,250
COWLITZ $806,500 $1,032,650 $1,248,150 $1,551,250
DOUGLAS $806,500 $1,032,650 $1,248,150 $1,551,250
FERRY $806,500 $1,032,650 $1,248,150 $1,551,250
FRANKLIN $806,500 $1,032,650 $1,248,150 $1,551,250
GARFIELD $806,500 $1,032,650 $1,248,150 $1,551,250
GRANT $806,500 $1,032,650 $1,248,150 $1,551,250
GRAYS HARBOR $806,500 $1,032,650 $1,248,150 $1,551,250
ISLAND $806,500 $1,032,650 $1,248,150 $1,551,250
JEFFERSON $806,500 $1,032,650 $1,248,150 $1,551,250
KING $1,037,300 $1,327,950 $1,605,200 $1,994,850
KITSAP $806,500 $1,032,650 $1,248,150 $1,551,250
KITTITAS $806,500 $1,032,650 $1,248,150 $1,551,250
KLICKITAT $806,500 $1,032,650 $1,248,150 $1,551,250
LEWIS $806,500 $1,032,650 $1,248,150 $1,551,250
LINCOLN $806,500 $1,032,650 $1,248,150 $1,551,250
MASON $806,500 $1,032,650 $1,248,150 $1,551,250
OKANOGAN $806,500 $1,032,650 $1,248,150 $1,551,250
PACIFIC $806,500 $1,032,650 $1,248,150 $1,551,250
PEND OREILLE $806,500 $1,032,650 $1,248,150 $1,551,250
PIERCE $1,037,300 $1,327,950 $1,605,200 $1,994,850
SAN JUAN $806,500 $1,032,650 $1,248,150 $1,551,250
SKAGIT $806,500 $1,032,650 $1,248,150 $1,551,250
SKAMANIA $806,500 $1,032,650 $1,248,150 $1,551,250
SNOHOMISH $1,037,300 $1,327,950 $1,605,200 $1,994,850
SPOKANE $806,500 $1,032,650 $1,248,150 $1,551,250
STEVENS $806,500 $1,032,650 $1,248,150 $1,551,250
THURSTON $806,500 $1,032,650 $1,248,150 $1,551,250
WAHKIAKUM $806,500 $1,032,650 $1,248,150 $1,551,250
WALLA WALLA $806,500 $1,032,650 $1,248,150 $1,551,250
WHATCOM $806,500 $1,032,650 $1,248,150 $1,551,250
WHITMAN $806,500 $1,032,650 $1,248,150 $1,551,250
YAKIMA $806,500 $1,032,650 $1,248,150 $1,551,250
How These Limits Are Set
Washington State conforming loan limits are determined by the Federal Housing Finance Agency (FHFA). The Housing and Economic Recovery Act of 2008 (HERA) requires the FHFA to monitor and track average home prices in the U.S., and to annually adjust the baseline jumbo loan limit as needed to reflect changes in national home values.
In other words, if prices go up considerably in a certain county, FHFA may increase the corresponding loan limits to keep pace with rising home values. Conforming limits are usually set at 115% of the median home price for each area, though they can exceed this level in some high-cost areas.
The 2025 conforming limit for most counties in Washington State is $806,500. The three exceptions to this baseline amount are King, Pierce, Snohomish counties. (See the table above for county-by-county details.)
In recent years, FHFA has used the median home values estimated by the Federal Housing Administration (FHA), which is part of HUD. So there are several federal housing agencies involved in determining loan limits.
How Do I Get the Best Mortgage Rate? Understanding the 13 Variables That Dictate Mortgage Interest Rate Pricing
When it comes to securing a mortgage, many homebuyers focus solely on the advertised interest rates they see online or hear about from friends. However, mortgage rates are not one-size-fits-all. In reality, they are influenced by a variety of factors specific to each borrower and property. Here are 13 key variables that impact mortgage interest rate pricing:
1. Purchase Price
The total cost of the home plays a role in rate pricing as it also can dictate the loan program (more below). Higher-priced homes may qualify for better rates due to a higher potential for that loan servicer to make more money on the interest.
2. Down Payment
A larger down payment generally results in better interest rates because it reduces the lender’s risk. A lower down payment may lead to higher rates or the need for mortgage insurance (under 20% down).
3. FICO Score
Credit scores are one of the most significant factors in mortgage pricing. Higher scores typically receive lower rates, while lower scores may result in higher costs or additional fees. The minimum FICO score to lend is 580 and the best interest rate pricing is over 780 FICO.
4. Occupancy Type
The intended use of the property affects interest rates. Primary residences get the best rates, while second homes and investment properties usually come with higher rates due to increased risk.
5. Loan Term
The length of your loan matters. A 30-year fixed mortgage generally has a higher rate than a 15-year fixed loan. Adjustable-rate mortgages (ARMs) can start lower but may increase over time.
6. Property Type
Different property types carry different pricing adjustments. Single-family homes usually have the lowest rates, while condos, manufactured homes, and multi-unit properties may have higher costs.
7. Number of Units on the Property
A single-family home will typically have better pricing than a duplex, triplex, or fourplex. Multi-unit properties present higher risk and thus carry slightly higher rates.
8. Loan Product
Conventional, FHA, VA, and USDA loans all have different pricing structures. Government-backed loans (FHA, VA, USDA) can sometimes offer lower rates, depending on borrower qualifications.
9. Loan Purpose
The reason for the loan affects pricing. Purchases generally have better rates than refinances. A cash-out refinance, which allows borrowers to pull equity from their home, tends to have the highest rates among these options.
10. Waiving Escrows vs. Impounding
If you choose to waive escrow accounts (i.e., handling property taxes and insurance yourself), you might see a slight increase in your rate. Once again, due to risk. Keeping an escrow account can help maintain lower pricing.
11. First-Time Home Buyer Status
Some loan programs and lenders offer rate discounts or special financing options for first-time homebuyers, helping them access lower interest rates.
12. Yearly Income
Certain loan programs provide rate advantages to borrowers with income below specific thresholds. Programs like HomeReady and Home Possible offer lower rates and reduced mortgage insurance costs for qualifying first-time buyers.
13. Day You Lock Your Rate
Mortgage rates fluctuate daily and can even change multiple times a day based on market conditions. Timing can play a crucial role in securing the best possible rate.
Final Thoughts
Understanding these 13 variables can help you better navigate the mortgage process and optimize your interest rate. If you're considering buying or refinancing a home, work with a trusted mortgage professional who can guide you through these factors and help secure the best rate possible.
If you have questions or need personalized mortgage advice, feel free to reach out!
What is Debt-to-Income Ratio?
Often shortened to "DTI", Debt-to-Income ratio is arguably the most critical qualifying ratios in mortgage financing. However, 99% of consumers do not understand this simple calculation (not an actual statistic - more of an observational exaggeration).
Whose fault is this? Are consumers not doing enough research before applying for a home loan? Or are mortgage professionals unique individuals that happen to possess the mental capacity to calculate this life changing equation?
Ding, ding, ding it is neither! Mortgage professionals are inherently terrible at explaining anything in socially accepted dialogue. We call a mortgage application a "1003" for god sake!
On my initial contact with a potential buyer, 9/10 times I get asked the question(s) - what price home am I approved to? Can I afford $300,000 homes or is that too high? Or some variation of these questions.
It is a lot harder to nail down a maximum "purchase price" as one might think. Much of a buyer's approval is dependent on the property itself, as the property (property tax amount, price of home, HOA dues or not, etc.) will dictate much of the monthly mortgage payment.
I can however, share with you the exact formula us mortgage professionals use to calculate your approved monthly mortgage payment, which is directly correlated to what you can afford "home price" wise.
Let's see what you can afford.
The general rule of thumb is on a conforming loan product we cannot exceed 50% DTI ratio (other products max out at 38-45%).
In the example below, I will use 50% DTI ratio.
Debt-to-Income Formula:
Gross monthly income x .50 = maximum allowable debt
Maximum allowable debt - existing monthly debt obligations (on a credit report) = allowable monthly mortgage payment
Debt-to-Income Example:
Dan wants to purchase a home. Dan makes $55,000 gross income per year and has a few tradelines/debts on his credit report. Here is Dan's maximum mortgage payment he would be qualified for.
$55,000 gross income per year
$4,583.33/month
Debts:
Auto loan: $300 payment/month
Student loan: $150 payment/month
Credit card: $25 minimum monthly payment
Total debt obligation: $475
$4,583.33 x .50 = $2,291.67
$2,291.67 - $475 = $1,816.67 allowable monthly mortgage payment
How easy was that?
I know, I know, I didn't blow anyones mind or prove to be a math mathematician. But, that is how easy it is. Instead of learning life applicable equations in 3rd grade, we learned cursive that is now obsolete. And instead of learning the same life applicable equations in college, we leared 3rd derivatives. Maybe not obsolete to you engineers, but to 99% of the population...we don't care about derivatives!
We want to buy houses with white picket fences! And DTI is how you calculate what you can afford.
Satisfied with how much you can afford?
If you are unsure how to calculate your gross wages, or what debt will be used in your DTI ratio, please call or email with any questions. Happy to help!
What is the Best Source of Internet Leads for Mortgage Professionals?
A discussion with an LO on Zillow Long Form by the NREP
Ironic that the NREP released this video this morning, as I have a scheduled call with a Mortgage rep from Zillow today. The part of Zillow Long Form that interest me, is that 60% of the leads are not working with an agent. Therefore, I am able to build relationships with realtors, by referring them business. However, the trick is, converting the lead.
What are your thoughts? Are there better internet leads out there for mortgage brokers?
Thank you NREP
Mortgage Interest Rates Fall to Lowest Level in Nearly Three Years
How low can mortgage rates go?
Mortgage interest rates continued their downward trend in the last week, falling again to the lowest level of the year and the lowest level in nearly three years, Freddie Mac’s latest Primary Mortgage Market Survey showed.
This marks the second week in a row that mortgage rates dipped to a new yearly low. Last week, Freddie Mac’s report showed that the 30-year mortgage rate fell 12 basis points to 3.59%, which was the lowest since February 2015.
But rates went even lower in the last week, with the average interest rate for a 30-year fixed-rate mortgage falling by one basis point to 3.58%. One year ago at this time, the 30-year fixed-rate mortgage averaged 3.67%.
This week’s new low of 3.58% is the lowest level that interest rates have reached since May 2013.
"Demand for Treasuries remained high this week, driving yields to their lowest point since February,” Freddie Mac’s chief economist, Sean Becketti said. “In response, the 30-year mortgage rate fell 1 basis point to 3.58 percent. This rate represents yet another low for 2016 and the lowest mark since May 2013."
Also falling was the 15-year FRM, which this week averaged 2.86%, down two basis points from last week, when it average 2.88%. One year ago at this time, the 15-year FRM averaged 2.94%.
Additionally, the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.84% this week, up slightly from the week before, when the 5-year Treasury-indexed hybrid ARM averaged 2.82%. A year ago, the 5-year ARM averaged 2.88%.
Click the image below for a graphical representation of just how low mortgage rates are right now.
(Image courtesy of FreddieMac)
Blog post provided by Ben Lane at HousingWire: http://www.housingwire.com/articles/36794-mortgage-interest-rates-fall-to-lowest-level-in-nearly-three-years?eid=327002753&bid=1373483
If You're Not Targeting Millennials, Wake Up.
"Millennials are so lazy!"
"I swear Millennials just sit on their phone ALL day, do they even work?"
"What even is Twitter?"
These are frequent statements and questions that flood our businesses today. The Millennial population is often overlooked or laughed at. The fact of the matter is, Millennials are now the dominant species in the business kingdom. They may not be the CEOs or VPs, but they sure as hell will be. Much of the Millennial population are still in college!
Whether you're in real estate or a Fortune Cookie Writer (yes, this is a real profession), it's time to pay attention to the flooding population of Millennials. They will be the next ones purchasing houses, eating fortune cookies, and running our economy.
Okay, maybe the Fortune Cookie Writer isn't too concerned with the Millennial population. But you real estate professionals, I bet you'll perk up while reading the next paragraph.
Check this out. The National Association of Realtors 2015 report on generational trends found that Millennials make up the largest share of home buyers at 32 percent. Even more striking, millennials now constitute 68 percent of first-time homebuyers. That percentage might soon grow even more: A survey of 1,002 adults by TD Bank released in July found that just under half of millennials will be looking to buy their first home over the next two years.
More than one-in-three American workers today are Millennials (adults ages 18 to 34 in 2015), and this year they surpassed Generation X to become the largest share of the American workforce, according to new Pew Research Center analysis of U.S. Census Bureau data. Therefore, it would be bloody ignorant to write off the Millennial population (insert British accent).
This milestone occurred in the first quarter of 2015, as the 53.5 million-strong Millennial workforce has risen rapidly. The Millennial labor force had last year surpassed that of the Baby Boom, which has declined as Boomers retire.
Pew Research Center's new analysis of labor force estimates are based on the monthly Current Population Survey, which serves as the basis for the official unemployment rate and labor force counts announced by the federal government each month.
With its disproportionately large share of immigrants, and at an age of transition from college to the working world, the Millennial generation’s workforce is highly likely to grow even further in the near future.
First, immigration to the U.S. will continue to disproportionately enlarge the ranks of the Millennial labor force. Immigrants coming to the U.S. are disproportionately in their young working years. Relatively speaking, few immigrants come to the U.S. during childhood or during older adulthood. In the past five years, over half of newly arrived immigrant workers have been Millennials.
In addition, a significant chunk of the Millennial population are 18- to 24-year-olds. These are the years when school and college-going are often center-stage, and as a result, labor force participation is suppressed. As the youngest Millennials get older, more of them will be looking for or getting jobs. Just how many more is tough to know, but the behavior of the Gen X population provides some clues.
Generation X’s labor force participation rate peaked in 2008 at 84%. In 1998, Gen Xers were roughly the same ages (18 to 33) as today’s Millennials, and that year, only 80% of the Gen X population was in the labor force. So we can assume that the Millennial labor force still has some room for growth in the years to come.
For Generation X (ages 35 to 50 in 2015), their place as the dominant generation within the labor force was very short-lived – just three years – and, on a chart, might even get missed, as they are sandwiched in between Boomers and Millennials. In 2012, the Gen X labor force (52.9 million) overtook the Baby Boom labor force to become the largest generation in the workforce, but that likely ended this year.
One caveat is that it’s possible that the Gen X labor force might grow. Immigration will add some workers to the Gen X labor force. Also, labor force participation has been diminished due to the Great Recession and modest economic recovery. If the job market continues to improve in the post-recession era, some Gen Xers will likely return to the labor market in stronger numbers. At the same time, though, the Gen X labor force is aging. The oldest Gen Xer is now 50, and thus beginning to age out of the prime working years (25 to 54), and this might counteract any potential growth in the Gen X workforce.
It’s worth noting that the Millennial population as a whole (not just its workforce) is already projected to surpass that of Baby Boomers this year as the nation’s largest living generation, according to the Census Bureau.
In the first quarter of 2015, about 45 million Baby Boomers were in the labor force. The Baby Boom workforce peaked in size at nearly 66 million in 1997. The youngest Boomer is now 51 years old, while the oldest Boomers are approaching age 70. With more Boomers retiring every year and not much immigration to affect their size, the size of the Boomer workforce will continue to shrink.
So, if I must, I will reiterate. Focus your marketing strategies and efforts on Millennials. They are, for the most part, no longer those lazy kids taking selfies every chance they get. They are now a vital piece of our recovering economy and essential to any progressive company/business.
Decoding Real Estate Code
Mortgage Banker, Umpqua Bank NMLS # 1424295
Apply Here
Buying and selling real estate is a daunting and expensive process. Luckily, there are many experts like lenders, realtors, inspectors, appraisers, escrow agents, and friends and family to help guide you through the process. These experts use many terms and acronyms that to the first-time home buyer make no sense. I call this, real estate code.
Mortgage Lender: "Hey Charles, thanks for sending in all of your information online, I’m thrilled to help you purchase your first home. Looks like you and Becky's FICO scores are excellent and your back-end DTI is under 43%, so you absolutely qualify for this home." A mortgage lender should never talk to an inexperienced borrower(s) in real estate code, but work with me for this example because it does happen.
What in the hell is a FICO score? Or a back-end DTI? As a home buyer, all you've heard is that you absolutely qualify for this home. Awesome! Move on, right? Absolutely not. You should never be afraid to ask questions, that is why you've hired real estate professionals. Leverage their expertise. My motto is that there are no stupid questions, only stupid mistakes. This is, most likely, the biggest purchase of your life. Therefore, don't make a stupid mistake because you're too afraid to ask a simple question.
Your savior, me, is here to decode this response from the mortgage lender. A FICO score is essentially your credit score derived from three credit bureaus. Most lenders use the middle score to determine what credit score to attribute to your loan file. Credit score is a huge determinant of your approval status and what interest rate you will pay. A back-end debt-to-income ratio (DTI) is what the borrowers debt-to-income will be once they begin paying their monthly mortgage payment (front-end DTI is what your current debt-to-income is before taking on a mortgage payment, and may include your rent payment, if applicable). If it is 43%, then 43% of the borrower’s income is going towards their proposed debts.
Just because Charles and Becky's back-end DTI is under 43%, does not mean that this mortgage payment is comfortable for their budget. Although, some borrowers, if spoken to in real estate code, freeze up and only hear what they want to hear (we're qualified for this home, yay!). If Charles knew what a FICO score or a back-end DTI was, he might ask the questions: “What were our FICO scores and are they going to negatively impact our interest rate?” and "Well what is our back-end DTI? We're only comfortable if our back-end DTI is under 33% so we do not overextend ourselves.” BAM, Charles just killed the question game. The answers to these questions will give Charles and Becky a way better understanding of their credit profile and loan situation.
Hopefully this example stressed the need to understand the fundamental, often used terms in real estate. You may not understand the entire process until you've bought and sold a few houses, but at least you'll be able to follow along with the lingo being used by real estate professionals so you can ask the right questions.
Without further ado, here are some basic mortgage terms that every potential home buyer should understand:
Annual Income
This is the combined annual income for you and your co-borrower. Include all income before taxes, including base salary, commissions, bonuses, overtime, tips, rental income, investment income, alimony, child support, etc.
Down Payment
This is the amount of money you will put towards a down payment on the house. Make sure you still have cash left over after the down payment to cover unexpected repairs, financial emergencies, closing costs, and any other unexpected costs associated with buying a house.
Monthly Debt
Include all of you and your co-borrower's monthly debts, including: minimum monthly required credit card payments, car payments, student loans, alimony/child support payments, any house payments (rent or mortgage) other than the new mortgage you are seeking, rental property maintenance, and other personal loans with periodic payments.
Do NOT include: credit card balances you pay off in full each month, existing house payments (rent or mortgage) that will become obsolete as a result of the new mortgage you are seeking, or the new mortgage you are seeking.
Interest Rate
Interest rate is the percentage of the loan that you will pay in monthly payments.
Annual Percentage Rate (APR)
A standardized method of calculating the cost of a mortgage, stated as a yearly rate, which includes such items as interest, mortgage insurance and certain points or credit costs. Because it includes these other items, it is higher than the interest rate a lender will quote.
Debt-to-Income (DTI)
Your DTI is expressed as a percentage and is your total "minimum" monthly debt divided by your gross monthly income. The conventional limit for DTI is 45% of your monthly income. A DTI of 20% or below is considered excellent.
Income Taxes
This is an annual tax that governments place on individuals' income. It includes federal tax, most states and some local entities. The national average is around 30% but can vary based on income, location, etc.
Property Taxes
Property taxes are an annual tax on homeowners' property and the tax amount is based on the home's value. Property taxes are typically impounded, and paid with your monthly mortgage payment.
Homeowner’s Insurance
Commonly known as hazard insurance, most lenders require insurance to provide damage protection for your home and personal property from a variety of events, including fire, lightning, burglary, vandalism, storms, explosions, and more. All homeowner's insurance policies contain personal liability coverage, which protects against lawsuits involving injuries that occur on and off your property.
Mortgage Insurance (PMI)
Mortgage insurance is required primarily for borrowers with a down payment of less than 20% of the home's purchase price. It protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan. This is also known as PMI (Private Mortgage Insurance).
HOA Dues
Typically, owners of condos or townhomes are required to pay homeowners association dues (known as HOA fees), to cover common amenities or services within the property such as garbage collection, landscaping, snow removal, pool maintenance, and hazard insurance.
Loan Term
This is the length of time you choose to pay off your loan (e.g., 30 years, 20 years, 15 years, etc.)
Appraisal
An analysis of the subject property conducted by a professional appraiser who will look at a property and give an estimated value based on physical inspection and comparable houses that have been sold in recent times.
Points
Factored into the loan's APR, a point equals 1 percent of a mortgage loan. Some lenders charge "origination points" to cover expenses of making a loan. Some borrowers pay "discount points" to reduce the loan's interest rate. Often in order to get a lower interest rate, lenders will allow borrowers to "buy down" the rate by paying points.
Escrow
An account in which a neutral third party holds the documents and money in a real estate transfer until all conditions of a sale are met. Also, an account in which money for property taxes and insurance is held until paid; money is added to the account every time a mortgage payment is made.
Title Insurance
Title insurance is a policy that guarantees that an owner properly has title to a property and can legally transfer title to someone else. Should a problem arise, the title insurer pays any legal damages. A policy may protect the mortgage lender, the home buyer or both.
FICO Score
The most widely used credit scores are FICO Scores, the credit scores created by Fair Isaac Corporation using three credit bureaus to determine scores: Equifax, TransUnion and Experian. Each FICO Score is based on the information the credit bureau keeps on file about you. These scores typically differ, and most lenders will use the middle score to determine your credit score used for your loan. If there are two or more borrowers on the loan, the lowest FICO score will be used on the loan profile.
To minimize any confusion throughout the loan process, I often ask my borrowers what their level of expertise is with buying and selling real estate. Depending on their answer, I will or will not use real estate code. If they are experienced borrowers, it is perfectly okay and more efficient to talk in real estate code. If they are first-time home buyers, then one should always avoid using real estate code and instead use baby steps through the lending process.
If you have any questions or comments, feel free to contact me at (360) 937-0983 or send an email to dylanlangei@umqpuabank.com. Thanks for reading!
New Product Launch: HomeReady
Umpqua Bank has just rolled out the Fannie Mae HomeReady product - which has undoubtedly solved many issues faced by potential homeowners. The HomeReady product is advantageous for borrowers who have relatives or non-relatives living in the home, who will not be associated with the loan, but would like to leverage their income to qualify for a HomeReady loan.
HomeReady Details:
- 10/15/20/30-year fixed-rate mortgages and 5/1, 7/1, and 10/1 ARMs available.
- 1-unit principal residence, including eligible condos, co-ops, PUDs, and manufactured housing or 2- to 4-unit principal residence (no condos, co-ops, or manufactured housing).
- Minimum down payment: 3%
- 5% minimum borrower contribution no longer applies. Gifts, grants, Community Seconds and Cash on Hand may be used for entire down payment, closing costs and prepaids.
- Minimum credit score: 620
- May have accessory dwelling units: Rental income may be considered in qualifying the borrower per rental income guidelines.
- No income limits in low-income census tracts.
- Non-borrower household income may be used (relative or non-relatives). Income must total at least 30% of the total monthly qualifying income being used by the borrower(s). (Note: Income from more than one non-borrower household member may be considered.)
- 25% MI coverage for LTVs 90.01-97% and standard MI coverage for LTVs of 90% or less.
For more information, feel free to reach out:
(360) 937-0983
dylanlangei@umpquabank.com
This summary is intended for reference only. All criteria are subject to the formal terms and conditions of the Fannie Mae Selling Guide and Servicing Guide. In the event of any conflict with this document, the Selling Guide and/or Servicing Guide will govern. https://www.fanniemae.com/singlefamily/homeready
4 Differences Between Mobile and Desktop Search
How the Two Vary & How to Become an Effective Mobile Marketer
Written by Dylan Langei
It wasn't too long ago (I even remember these days) that desktops dominated the online platform market. Having a phone with a keyboard was revolutionary, let alone a touchscreen keyboard with internet access. Nowadays with the proliferation of smartphones and success of the tablet, mobile's rise has been undeniable and relentless. By the end of 2013, a full 56% of digital media consumers constituted the 'multi-platform majority' by actively using both a mobile device and a desktop.
There are four fundamental differences between how users interact with desktops and mobile devices. Companies must be aware of these differences, in order to tailor their uses of each appropriately.
1. Rate of Growth
U.S. smartphone engagement has grown from 131 billion total minutes to 442 billion (237%), while desktop experiences a 429 billion total minutes spent (7% increase). Total mobile activity including mobile browser usage recently eclipsed 60%, as desktop accounts for the remaining 40%. Mobile browser usage has been consistently leveling out, while mobile usage is on an exponential trend. Why? Even though it might not feel like it, cell phones and data plans are getting cheaper. Plus, the majority of cell phone owners have their phone on them 24/7. Personally, I get separation anxiety if my cell phone is more than 10 feet away from me. If you're over 35 or so years old you're probably thinking I'm crazy. Hate to break it to you, but us Millenniums and Boomlets see our smartphones as an extension of our hand. This, however, is not the case with desktops. I don't know too many people carrying their laptop around all day or having a full blown panic attack because their desktop computer is out of sight. Since most cell phone owners have their smartphone on them more often than a desktop, they are more inclined to use their phone - hence, the crazy amount of growth in cell phone use.
2. Activity & Use
Mobile users are on apps 85% of the internet time spent on their phones, while desktop users typically navigate through browsers and control panels. Mobile apps have gotten so advanced that you can perform the same tasks done on desktops, just through specified app platforms. You can hail a cab (Uber), stream music (Soundcloud), watch videos (YouTube), and so much more. However, the majority of mobile app engagement comes from Social Networking and Games and Radio while desktop usage is more tailored to Search and News. This validates that mobile devices are more heavily used for entertainment and communication while desktops are utilized for more "productive" work environments.
3. Advertising Maturity
Apps have not attracted the advertising dollars its audience warrants due to it's immaturity and physical space, in comparison to desktops. Like any emerging advertising medium, it takes time for the ad buying and selling infrastructure to develop. Desktops provide a lot more physical screen space for placing ads. A sidebar of advertising is not as intrusive on a desktop as one on a small 3x3 inch smartphone. This is where native advertising, which I wrote a recent blog on, could have a huge surge in use. Since there is limited room for strategically placed paid advertising on phone screens, companies can begin sponsoring ads in the form of articles on a mobile site. That way the ad consumes less screen space, and feels more authentic.
4. Conversion Rate
For a desktop, add to cart rate of 8.52% and actual sales conversion rate of 2.78% are higher than smartphones 4.7% and 0.8%, respectively. These are significant statistics, especially if you're an eCommerce business who is trying to implement a mobile site. Is it even worth it? Yes, it is. Why? Well these stats could begin to change in favor of mobile conversions with the recent creation of Apple Pay and various other mobile payment programs. Mobile sites are still a fairly new phenomenon, so it is very difficult to alter a customers behavior. To counteract this, mobile payment programs are insuring security of customers financial information, which is beginning to establish trust between customers and mobile pay. So, once customers become accustomed to using mobile pay as a regular transaction source, and realize the convenience, mobile purchases are projected to increase.
Starbucks has effectively gotten over the mobile conversion hump, if you will. After the release of their app, customers now pay for a purchase using a smartphone 7 million times a week, accounting for 16% of total transactions. Now for the important part. How did Starbucks gain so much traction and success? The answer is rewards. Who doesn't love rewards? Due to these rewards, Starbucks has gotten customers accustomed to engaging with them via mobile devices. Starbucks's main reward program, My Starbucks Rewards, allows shoppers to earn special discounts and freebies from making a purchase via their app. Why does Starbucks care so much about increasing mobile purchases? First off, it generates loyalty among customers, and also provides a rich trove of data about their most loyal customers. This data can then be leveraged to shape marketing tactics, promotions, and even store locations. Pretty damn smart right?
The good news is, you can transform your business into a mobile marketing powerhouse as Starbucks has done. To replicate Starbucks' success, you must know what your customer wants out of your app (how, when, where, and why they are interacting with the app), design an attractive and user-friendly app, provide rewards for using the app, and constantly engage with your customers via the app. If you can master these four things, like Starbucks, your business will acquire immense benefits from the exponential growth of mobile marketing.
To see more on building a great mobile site: Click here
Don't Even Bother with Code, Learn Squarespace
If Time is Money - Codecademy Drools and Squarespace Rules
Written by Dylan Langei
VS.
So you're about to build your first website. You have no prior coding or web development background, and you need to make a decision. Do you begin the basic coding lessons on Codecademy and build a website from complete scratch? Or do you use a service like Squarespace with existing web templates?
Let me bring you back to my junior year of college. I was a young motivated entrepreneur, excited to start my first business and learn the "ropes". A friend and I founded Fuhgedaboudit Supply Co., an eCommerce clothing business that designed and sold snapbacks, shirts, sweatshirts, socks, and various other accessories tailored to the 18-24 year old male demographic. Considering we were strictly online with no brick-and-mortar location (lower overhead), we needed to build a website. I had an acquaintance whom I had met through some friends, that owned his own small web design & development business. So I thought, cool, a small business helping another small business. Maybe even a friend discount thrown in there. When my business partner and I met with him, he quoted us $3,000 for a fairly simple eCommerce website. Our business account currently had $2,700 in it, and we hadn't even manufactured any clothing. I thought my days as an entrepreneur were over.
I went home that night pondering other options. Do I ask my parents for money? Do we forego building a website and just sell through retailers? I began researching services that allowed inexperienced web developers to build websites. At that time I stumbled upon Shopify, a very well known eCommerce building service. I began the free trial, and ended up building our business a fully functioning eCommerce site in 10 hours for around $30 a month. This was no Diamond Supply Co. website, but it got us online and able to receive orders.
Our first, very rudimentary website:
I would no longer advise using Shopify, as we were eventually not satisfied with the templates and options available. But, the point of this story is, I built a fully functioning website without having to pay $3,000 upfront. If it was not for Shopify, we never would have been able to start Fuhgedaboudit.
A few Fuhgedaboudit products:
Better options to Shopify are Squarespace, Wix, and WordPress. Although, be warned, WordPress does take a little more coding background than the former two. To see the pros and cons of Wix and WordPress, go to this really cool search engine. Squarespace, I'll talk about later on, because I am a full blow Squarespace proponent.
Why is Coding a Good Skill for a Beginning Digital Marketer?
This question may be a bit deceiving, because I do not believe it is a necessary skill for a beginning digital marketer to possess, but it is a concept that is vital for them to understand. Because digital marketing is, well, digital - it is imperative for a digital marketer to understand the framework of how a website is built. Why is this? Let's say you've identified a product page that many customers are leaving without completing a purchase. You've attributed this bounce rate to a landing page that is promoting a price that is too high. Instead of having to bother the web engineers, with a basic understanding of HTML, you could jump into that product page, locate the code <body><p>$19.99</p><body> and lower the price to <body><p>$14.99</p><body>. You've successfully dodged a migraine which would have been caused by the web engineers taking five hours to respond to your maintenance request, and you've built a bit of credibility.
My Experience Using Codecademy:
I spent two hours on Codecademy going through the HTML Basics training. I completed HTML Basics I and got to step 4/16 on HTML Basics II. I am 14% through the HTML & CSS course, and Codecademy estimates this full lesson takes around 7 hours. Through these lessons I've learned how to add headings, body text, pictures, links, ordered lists, and a few other skills. The "website" I have created in those two hours looks like a 5-year-old's coloring book, I'll be honest. But, I have learned some valuable terminology. Here is proof I spent two hours learning "code":
Beginning:
End:
Now, if someone came up to me and said create an image with a link to another website. I would say, can I look it up on Google? It might just be a personal battle of mine, but online programs like Codecademy are not propitious to my ability to retain information. For example, you first learn how to link an image to a separate domain, then the next lesson asks you to do it again without any instructions. I still had to look back at the previous lesson to remember the exact code. All in all, this was a waste of my time. However, this is not a waste of everyone's time. My method of learning is more conducive to the "on campus" crash course where an instructor is present to answer any questions and guide me through tutorials. It is important to figure out your personal learning style, and taking on code that way. If you can, start young.
Pros and Cons of Using Squarespace:
OK, let me start off by saying that I am a full blown Squarespace advocate. This website that you are currently on, was made using Squarespace. I have built a wholesale distribution company a website using Squarespace, along with my second business venture called Cheative. Squarespace kicks ass, but as any other platform providing site, it has it's limitations:
Pros:
- Cost-effective.
- Free 14-day trial with no credit card required.
- Sleek and user-friendly templates.
- Responsive to mobile devices.
- Customization and maintenance is simple.
- Built-in online store.
- Free URL and hosting is done by Squarespace.
- Available widgets.
- SEO capabilities.
Cons:
- Squarespace Commerce only has one payment option.
- Not open-source - making quantity of templates and extensions limited.
- Built in analytics is a bit weak, but you can inject your Google Analytics code into a simple box that integrates it across your entire website.
Recommended Users:
- Small business owner (coffee shop, restaurant, fashion lines, boutiques, etc.).
- Person who desires to have an online portfolio to showcase their work (recent graduate, photographers, artists, etc.).
Not Recommended Users:
- Large organizations (banks, retailers, etc.).
As I said before I have been an advocate and user of Squarespace for about two years now. I have ran a small business using Squarespace, a personal portfolio (this website), and am starting another small business. The greatest part about Squarespace, is once you get the hang of it, everything is simple and quick. Remember the screenshots above? Those lessons that took me two hours on Codecademy to add a few headings and pictures? I built an entire eCommerce page on Squarespace in 15 minutes. 15 MINUTES PEOPLE. I'm sorry, but time is money and I don't have time for Codecademy. Unless you're a large organization that needs a very secure and customizable website, and you have the means to pay thousands of dollars for a website, Squarespace cannot be touched.
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Why Companies Should Start Investing in Native Advertising
Why Companies Should Shift Away From Programmatic and Lean Towards Native Advertising
Written by Dylan Langei
What is Programmatic Advertising?
Sounds complex huh? Or at least very calculated, and it is. Programmatic advertising is driving digital media buying practices forward by combining rich customer data with algorithmically driven buying platforms to make digital advertising dollars more effective in reaching target audiences. Whew, that was a mouth full. Programmatic ads are purchased in an auction based method, with the buyer paying whatever price an ad is worth at that given time - using surplus amounts of data to figure out the perfect ad, the right person, and the right time. As you can see, programmatic ads improve targeting while also streamlining ad purchases and transparency when it comes to a transactions particulars. Due to its effectiveness, eMarketer estimates the programmatic ad space will quadruple to $8.7 billion by 2017. Fairly large market for those annoying sidebar ads on your Pandora station, but hey, they're effective.
What is Native Advertising?
Rather than throwing ads next to relevant content, native ads are integrated directly into the content - providing a look and feel of an editorial piece. The most common form of native advertising is publisher-produced brand content, which is similar to a traditional advertorial - essentially a paid placement attempting to replicate that of an article. Meh, still think native ads will just be a passing fad? Business Insider estimates the native advertising market to reach around $18 billion by 2017. Yup, that's about $10 billion more than programmatic advertising by 2017. Oh, so now you're no longer slumped over in your computer chair?
Where Will Advertising Lean?
Advertising is always changing, because users are constantly changing their buying behaviors and how they engage with businesses. Therefore, there is no doubt in my mind that advertising will continue to move away from programmatic, and towards native. This does not mean I think native advertising is the eternal solution, but for now, it's very promising. Native advertising is less obtrusive, and feels more authentic. However, native ads can also be deceiving and pose potential problems for businesses. Even though native ads are meant to provide and feel like an editorial piece, they are still required to clearly state or display that the viewer is experiencing an ad. Failure to do so can destroy brand equity, and bring on legal implications.
As a user of the internet and any space where ads may appear, wouldn't you rather experience a native ad than a programmatic one? That's what it's all about, user experience - businesses do not choose where advertising moves, consumers do. Personally, I prefer the native ad that is validated by a reputable podcast over a pop up ad that interrupts me from reading a blog post. But hey, I'm just one user.
Where Should Advertisers Migrate Their Ad Dollars?
NATIVE ADVERTISING. If you don't believe the numbers, just think like a consumer. What would you prefer? Nearly seamless integration of ads (native), or ugly boxes injected with advertising that is somewhat related to the content you're viewing (programmatic)? Also with the continuing surge of social media engagement, native advertising will continue to take over. It is very difficult to integrate programmatic advertising on social media outlets like Instagram (which has the most engaged user base), while a native advertising strategy doesn't seem too far fetched.
Actually, native advertising is extremely prominent on Instagram. As seen above, Instagram has titled the post as "Sponsored" so the user base knows that they are ads. But the pictures and content are very native, in that they explain a scenario or a story - as an editorial would. These ads are not obtrusive, as an Instagram user can simply scroll right by them. They are also no where near ugly or clunky boxes of misleading offers. The growth of social media is the main reason I am fully backing native advertising, and you should too. Ready your troops, because native advertising is here to stay.
How a Google AdWords Certification Makes You the Modern Don Draper
The Fundamentals of the Google AdWords Exam and How to Leverage That in Your Career as a Digital Marketer
Written by Dylan Langei
What is Google AdWords?
Sounds like a board game huh? But no, Google AdWords is no board game - and we all know Google wouldn't develop a board game unless they had a chance at monopolizing the market. Google AdWords certification is a professional accreditation, awarded by...wait for it...Google. An AdWords certification allows an individual to be recognized as an online advertising professional. Who cares? Well businesses do. AdWords campaigns allow businesses to choose where their ad appears, set a budget they're comfortable with, and measure the impact of their ad.
The Exam...Dun, Dun, Dun:
There are five sections to the Google AdWords exam, covering various aspects of online advertising, essentially making you an online advertising badass. OK, not as badass as Don Draper, but we can all dream. Here are the five:
AdWords Fundamentals: This AdWords Fundamentals exam covers basic and intermediate concepts, including the benefits of online advertising and AdWords, and best practices for managing and optimizing AdWords campaigns.
Search Advertising: The Search Advertising exam covers advanced concepts and best practices for creating, managing, measuring, and optimizing Search campaigns.
Display Advertising: The Display Advertising exam covers advanced concepts and best practices for creating, managing, measuring, and optimizing Display campaigns.
Video Advertising: The Video Advertising exam covers basic and advanced concepts, including best practices for creating, managing, measuring, and optimizing video advertising campaigns across YouTube and the web.
Shopping Advertising: The Shopping Advertising exam covers basic and advanced concepts, including creating a Merchant Center account and product data feed, and creating and managing Shopping campaigns.
A Calculated Dive Into Google AdWords:
Google AdWords offers many benefits to a business aiming to gain some traction online with their ads. There are four that really sell this thing:
- Target Your Ads: ability to show your ads to reach your "buyer persona" and people with specific interests through keywords, ad locations, demographics, devices, and age/location/language.
- Control Your Costs: complete control over how you spend your money. AdWords does not require a minimum dollar amount, making the service manageable for small or large firms. Your business has the ability to select how much you spend per month, day, and per ad while only paying when a user clicks on your ad.
- Measure Your Success: everything on Google AdWords is traceable - from click throughs to purchases - allowing you to see which ads lead to conversions and which do not. This leads to boosting the return on your investment (ROI) through an understanding of the analytics.
- Manage Your Campaigns: let's say you are in charge of overseeing 100 various ad campaigns. With Google's My Client Center (MCC) you are able to easily view and manage all of your AdWords accounts from a single location. Also provided is AdWords Editor, a free downloadable app that allows you to edit your campaigns offline, and then upload the changes to AdWords.
Google also has one of the most extensive advertising networks, I mean, it's goddamn Google we're talking about. Google has two main networks - the Google Search and Google Display Network.
Google Search Network: includes the behemoth, which is Google Search, along with hundreds of other non-Google search partner websites like AOL. These sites all show AdWords ads that match search results. Say you're searching for running shoes, a Zappos ad might pop up on the side bar, since they are an online shoe company.
Google Display Network: includes a collection for Google websites like Google Finance, Gmail, Blogger, and YouTube. These ads are matched to the content that is being viewed on that particular page. If you're watching a YouTube video on how to design logos on Adobe Illustrator, an ad for a design firm might be displayed somewhere on the page.
You might not believe this, but higher quality ads can lead to lower prices and better ad positions. OK, the better ad position makes sense, but lower prices? This phenomenon will be explained in a second. The positioning of your ad is completely contingent on your Quality Score and Ad Rank. I would attempt to explain this, but I'll just let Hal from Google do the talking. I'm sure he gets paid more than me. Also, please notice the red stapler and comb over - and yes I am making a reference to Office Space.
Getting past Hal looking like Milton, he explains the AdWords Auction fairly well. Although a complex formula, it rewards businesses for putting together quality ads using a fair auction system. Love it.
Applying Google AdWords For a Client:
With a deep understanding of Google AdWords and certification in hand, the Don Draper's of organizations will see you as a valuable asset. Why? Well because EVERYTHING is moving online. Because more people are active online, businesses are moving online. Therefore, advertising is moving online.
Don Draper would absolutely be scratching his head at this statement, but it's true, the internet is consuming paper advertising. Just read my A/BAMA blog regarding Barack Obama's 2012 reelection campaign, and how he leveraged online advertising to beat out Mitt Romney. If the President of the United States is advertising online for his reelection campaign, you better be comfortable with the digital realm of advertising - or you'll end up defeated by your competitors. Being able to run and manage an effective ad campaign could increase a firms ROI, brand awareness, customer loyalty, and engagement with customers. These are all valuable assets to be able to bring to a business. Shoot, if you are able to effectively translate these benefits to clients and show success, you might just become the next Don Draper.
To take the Google AdWords exam, sign up for Google Partners.
What Google and The Godfather Have in Common
The Fundamentals of Search Engine Marketing
Written by Dylan Langei
The Godfather, widely regarded as one of the greatest films of all time, focuses on the powerful Italian-American crime mob family of Don Vito Corleone. The Corleone's were the most powerful mafia family in New York City, participating and controlling almost all gambling, drug trafficking, and corruption. OK, Google is no mob family - and they certainly are not exploiting or indulging in corruption. But, Google does control and essentially own the Search Engine Marketing market - similarly to the Corleone family controlling and owning all illegal activities in New York City. You pay the mob to do business in their city, just like you have to pay Google to get noticed...well, anywhere online.
Why is Google the Godfather of PPC/Paid Search?
We, the users of Google, made them! As of December 2012, Google held a 65.2% share of web search volume worldwide, with 114.7 billion searches that month. Therefore, it's fairly important to have Google on your side. So if you want to reach your target audience, and they're completing on of those 114.7 billion searches, it is worthwhile to promote your search engine ranking and keywords.
Paid vs. Organic Search
My last blog post How SEO is Becoming Less Techy covers organic search, so I won't spend much time revisiting that topic. Paid search, or Search Engine Marketing (SEM), is the various means of marketing for a website via search engines, and entails both organic search engine optimization and paid search strategies. Paid search allows you to pay a fee to have your website displayed on the search engine results page when someone searches for specific keywords or phrases related to your website.
How Paid Search Works
The three main components of a paid search campaign are keywords, ads, and landing pages. These campaigns can be run through Google AdWords, one of the most successful paid search campaign services.
- Keywords: start out by giving Google a list of keywords, which then tells Google to display your ad when those keywords are searched for.
- Ads: you must design ads that are relevant to the search query and attractive enough that the searcher feels inclined to click on them.
- Landing Page: once you've gotten a searcher to click on your ad link, they will be directed to your landing page. The goal of this landing page is to get viewers to convert in some way.
Why Should You Run a Paid Search Campaign With Google Adwords?
Google AdWords is Google's online advertising program that lets you reach new customers and grow your business. You're allowed to choose where your ad appears, set a budget you're comfortable with (you only pay when the ad is clicked on - results based), and you can measure the impact of your ad.
There are 4 reasons your business should run a Google Adwords campaign:
- Organic Rankings Are Volatile: one day you're in the top five for a high-priority keyword, and the next day you're nowhere on that search page. This is because of Google's constant algorithm updates and user-interface changes. With Google AdWords, once you have the right mix of quality score and budget, your ad position is fairly consistent.
- Fairly Low Financial Risk: a campaign on Google AdWords has no minimum budget, can be cancelled at any time, and you are only charged when a user actually clicks on your ad. Therefore, your business is only charged for visits to your landing page, which hopefully lead to conversions. Google AdWords also doesn't require any financial commitment up front. Your business only pays when results are given (users click on the ad), which is a great test bunny for the keywords, ad style, and landing page you have chosen.
- Increase Click-Throughs: although clicks are not a measurement of success, they are a prerequisite for conversions. 50% of clicks generated by paid ads are not replaced by organic clicks when the ads are absent and the website has a first position organic search ranking. This shows that paid ads cannot be replaced, even by the best organic search ranking.
4. Increase Probability of Conversion: as stated in #3, click throughs do not guarantee conversions, but they sure as hell help. Some agencies report increases in conversions as high as 200 percent as a result of combining SEO and paid search. That is pretty remarkable, and 200 percent worth the cost of a Google AdWords campaign.
Example of an Effective Google AdWords Campaign
Elance used Google AdWords to promote web development & design on the platform WordPress. This is an effective campaign for 4 reasons:
- They have included proof and credibility to their ads (along with numbers) by focusing on the fact that they've had over 25,000 happy customers. That is a significant amount of clients that they've served, and looks very credible to a new customer.
- Elance integrates a compelling offer in the ad by offering "top design & development from $99." $99 to build a top-tier website? Sure I'll click on the ad to see what they're offering.
- They've also directed the audience to a landing page that is not their home page, but is a custom URL to reinforce what they're offering - "Custom_Design."
- Elance slips in a call-to-action at the end of the ad, "Start Now!" so that users know what to do if they would like to take advantage of this great offer.