Connect with us

Business

Exclusive: 5 Mass Email Marketing Techniques You Need to Implement

Published

on

5 Mass Email Marketing Techniques You Need to Implement

#Mass #Email #Marketing #Techniques #Implement

Over the past few years, we’ve heard conflicting opinions about the success of mass email marketing. 

Many marketers believe it’s an obsolete tactic and prefer social media to increase brand awareness and customer base. Is this, however, the case? 

Is mass email marketing a thing of the past? The short answer is no.

So what lies behind its power, and how can you use mass email marketing as an effective strategy to grow your business and acquire more happy customers? Let’s start by understanding what mass email marketing is and why it’s crucial.

Mass emails are typically delivered to an unfiltered audience that may or may not be interested in what you have to offer. Today’s customers want personalized emails with information and special offers relevant to their immediate requirements. As a result, marketers now leverage email automation to send emails at scale and achieve their marketing goals.

Why is mass email marketing important?

According to a McKinsey analysis, emails are 40 times more efficient at acquiring new clients than social media. This number is the outcome of the high volume of emails (306.4 billion) sent and received every day in 2020 alone. 

Advertisement

According to a Statista report, this rate will rise, and the email marketing channel will reach 4.6 billion worldwide users by 2025.

Source: Statista

Mass email marketing has come a long way in the last decade, especially since the pandemic. Opening and reading emails was initially limited to a PC desktop, but now we have dedicated mobile apps.

Today’s emailing software uses machine learning and automation to offer tailored information at scale. People are sick of seeing the same old messages and now prioritize diversification. Visual diversity is also critical to a marketing campaign’s success.

You can still mass email your list; however, dynamic content tools allow you to replace particular elements of a bulk email with material that varies by the recipient. 

A brand, for example, may send out a daily or weekly newsletter with ads tailored to each subscriber – with an event invitation or a product offer, based on what the subscriber has previously engaged with.

How to send mass emails

There are three main ways you can send bulk emails. Still, the best one is through a dedicated email marketing software that makes it easy to create, send, and deliver bulk emails. Besides this, you can use Gmail or Outlook. However, certain limitations make emailing through them more time-consuming.

Mass email with email marketing software

Setting up an email marketing account is the first step in creating an email marketing campaign. You can use affordable email marketing services that won’t break your bank and give you plenty of features to play around with.

After choosing a platform, create a new campaign and build your emails. Fill in some basic details about your email blast, such as campaign name, type, subject line, and sender name.

When it comes to campaign types, an HTML campaign is the best option because it allows you to integrate photos, links, text, and other unique elements into your emails.

Advertisement

With an email marketing tool, in addition to design elements, you get other benefits such as:

  • Email design options
  • Email list management
  • Personalized emails through email segmentation
  • Advanced reporting and analytics
  • Optimization tools (A/B testing)

Mass email with Gmail

Gmail is great for sending emails to individual contacts, but what if you want to email a large group of people? 

You need to use both Gmail and Google Drive to mass email. 

  1. Open a new Google Doc (type your email)
  2. Open a new spreadsheet
  3. Click Extensions, Add-ons, and then Get add-ons

    Yet another mail merge
    Source: Google Sheets

  4. Type Yet Another Mail Merge and download the app

Download yet another mail merge

  1. Select Extensions > Add-ons > Yet Another Mail Merge > Start Mail Merge
  2. Import your contacts via Gmail or manually
  3. Add a sender name and select your email draft (doc from the first step)
  4. Click Send

Keep in mind:

  • You can send only 500 emails per day with Gmail
  • Deliverability issues can arise with this method
  • You get limited design capabilities

Mass email with Outlook

Like Gmail, mass emailing via Outlook is possible with certain limitations. To start sending mass emails using Outlook, follow the steps below:

  1. Open Microsoft Word and write your email

write email in microsoft wordSource: Microsoft Word

  1. Open the Mailings tab from the ribbon

    mailing tab

  1. Click Start Mail Merge, and then Email Messages

start mail merge in word

  1. Click Select Recipients and choose from these three options:

    select recipients options

  2. Click Finish & Merge, then Send Email Messages
  3. Finally, write the email subject line and click Ok

Limitations to consider:

  • Daily sending limit
  • Poor email deliverability
  • No design customization

5 ways to create efficient mass email campaigns

Now that you understand the different ways to create your bulk email campaigns, it’s time to analyze email marketing best practices to develop high-converting campaigns that’ll take your efforts to the next level.

Email design is crucial

Email newsletter design is one of the most crucial elements in any email marketing campaign. Email platforms provide you with advanced email builders to create attractive and engaging email templates and increase conversion rates. If you’re unsure about making a campaign from scratch, you can select a template from their email library.

To simplify email marketing efforts, you can choose a specific template for your niche or create your own design and save it for future use. Most email marketing platforms offer plenty of room for customization with drag-and-drop builders that let you import different elements into your design.

Some of their email blast templates are also mobile responsive, which is crucial as now most users open emails from their smart devices. You can also use custom editors to implement high-converting elements like videos, countdown timers, and product blocks into your campaigns and take them to the next level.

Tip: After creating your email design, make sure your email looks good on any device using the “preview” feature, or send a test email to yourself.

Segment your recipients and send personalized emails

Succeeding with mass email marketing means creating significant value for your audience. Segmentation is the best approach to create large campaigns while remaining targeted with your message.

You can do this with email software to organize your contacts based on demographics like age, gender, or interests. You can create more personalized emails that still target a larger audience with all this data. Having the same characteristics for each segment is crucial in this step to ensure a mass email campaign’s efficiency.

Generic communication is no longer effective. To act, consumers need to see the value in your messages. This enhances your conversions and establishes a loyal customer base who’s happy interacting with you.

Advertisement

Test your email deliverability

Before sending a mass email campaign, a basic approach is a content spam test. Testing your campaigns can help you spot spam words, avoid unsubscribes, and predict if your email will end up in the spam folder.

Inbox Service Providers (ISPs) have no idea what to expect from brand new domains and IP addresses because they don’t have an established reputation. A one-way ticket to the spam inbox for any new domain or IP is a mass email campaign right out of the gate, so be cautious of where you send emails from in the first place. 

If you want to send many emails at once, consider using an older domain or warming up your IP. You’ll almost certainly get better results this way. You should also avoid emailing an outdated list and expect your emails to appear in the inbox. Even if you believe your email campaign will pique their attention, it’s best to repurpose or delete your old email list. You can easily do it with email list manager software.

Old lists usually end up in the spam bin, especially after the GDPR went into force. Make sure your lists are clean and include contact details of people who have opted-in to receive emails from you or marketing emails in general. These steps ensure high email deliverability and enable an efficient bulk email campaign.

Track and analyze your campaigns’ KPIs

One of the things you need to create effective mass email campaigns is data. To optimize your marketing efforts, you need to collect key insights and metrics such as opens, conversions, click-through rates, and more.

Monitoring these parameters helps you make critical decisions about your next email marketing efforts. So, what key performance indicators (KPIs) would you analyze to determine whether your campaigns are effective?

  • Open rate: Of all people who received your email, this is the percentage of people who opened it. A big factor that plays a significant role in your open rates is timing. Schedule emails at the right time when sending mass emails.

Tip: If the subject line is appealing and the reader believes the email contains valuable information, they will open it. A pro tip is to explain why the reader should care.

  • Click-through-rate (CTR): This metric describes the number of people who clicked a link in your email. The goal of your content should be to get the reader to click on the call-to-action (CTA). CTRs are usually low when your copy doesn’t offer value or convince the reader to take the extra step.
  • Unsubscribe rate: This is the percentage of subscribers who opted out of your email list. When you send a bulk email campaign, expect some people to unsubscribe, but don’t worry about it. Unsubscribes may be due to the frequency of emails, type of content, or many other factors. It’s essential to conduct real-time reporting and analytics to keep track of the necessary KPIs and metrics. Data-driven decisions power your email marketing strategy.

A/B test your campaigns 

To keep up with your recipients, you need to find out what they like best. As such, testing is essential to your email marketing efforts.

A/B testing determines how your audience interacts with your mailing campaigns. You can send several versions of the same campaign to see which components resonate better with your buyer persona. Understanding what elements work best for your audience is critical and can skyrocket your campaign’s success.

You can A/B test different elements of your email design, such as:

  • Subject line
  • CTA
  • Visuals
  • Interactive elements

A/B testing can help you find the sweet spot to increase audience engagement and improve return on investment (ROI).

FAQs about mass email marketing

Many questions crop up when we talk about mass email marketing. And if you know the answers, you’ll avoid confusing bulk email marketing as a spam technique.

How often should I send mass emails?

Sending one or two mass emails every week is ideal for most brands, especially if you’re just getting started with email marketing. When it comes to frequency, context is crucial. You need to set the frequency based on your email marketing approach.

What’s wrong with mass email blasts?

Abnormal activity can be reported in email accounts, and sending a bulk email out of the blue is sometimes a red flag. Your IP address may be blacklisted, and you may be banned from using your service provider, especially if your emails lack personalization, relevance, and tone.

Advertisement

How to measure a mass email campaign’s success

Measure primary email metrics like open rate, click-to-open rate, unsubscribe rate, and email delivery rate to see if your email campaign was successful.

Share your message the right way

Mass email marketing is an excellent way to share your message, but your campaigns need to evolve as customer behavior and interests change. Generic email is no longer relevant, and brands need to optimize their campaigns and create valuable content for the different email segments.

Email design is an excellent place to start. However, you only have room for customization if you use email software with a library of email templates. When an email is in place, segmentation and personalization are two parameters that make or break your campaigns. So, take some time to complete this challenging task.

Finally, focus on email deliverability and trust your analytics to optimize your email blasts. Email marketing is an ongoing process that requires a lot of experimentation. You can also A/B test elements of your emails to understand what works best for your audience and provide your readers with a unique experience.

Until the next one, keep sending emails.

Struggling with email delivery? Learn more about email deliverability to get that message straight to your customers’ inboxes.


Business

Exclusive: 6 Essential Elements of Getting More Customers – TalkOfNews.com

Published

on

By

6 Essential Elements of Getting More Customers

#Essential #Elements #Customers

Opinions expressed by Entrepreneur contributors are their own.

There’s no one way to get customers. It should be a multi-faceted approach, not only for the near future, but also to create enough inbound traffic so that two years from now, having taken the right actions today, your offerings practically fill themselves up. This is why getting customers needs to be a system. Like cogs in a wheel, there’s an integration, and if one gear is off, you can’t expect the most effective results.

Here are six essential elements that go into getting more customers. The system is the acronym PEOPLE. It is, after all — more people, more customers — that we are striving for.

Related: 3 Easy Ways to Attract More Customers Fast

1. Prospecting

Often, the number one stop-block keeping a business from getting more customers is that they are starting with too small of a number at the top. There are not enough prospects to begin with to convert to customers. This leaves too much pressure to convert the limited number of prospects. What happens when there’s pressure to make a sale? Or worse yet, the customer feels the pressure? They back up, and it becomes a self-defeating cycle.

The solution is to have various active and continuous prospecting systems in place, feeding in prospects all the time. It’s best if these prospecting systems can run like a machine with tasks being delegated until you or a sales representative may need to step in.

With continuous prospecting systems in place, this is where the greatest reward may be down the road a bit. But here’s a forewarning: When do most people stop or ease up on prospecting? When they’re busy. What happens then? When they slow down, there aren’t enough people knocking at the proverbial door. So, the feast-or-famine cycle continues. Systematize your prospecting so that there’s a constant and steady stream of possibilities.

2. Exposure

Again, this is more longer-term thinking, but it’s so important for your future. Exposure comes from the content you are putting out —writing articles, podcasts as host or guest, books, live streams and social media. Rarely are the results immediate, which is what causes many people to give up before rewards are seen. Think of it as building lurkers (people watching you that you have no idea are there). Although it can sometimes feel like you’re shouting into an echo chamber, chances are, there are prospects watching what you’re doing.

These “lurkers” are building a relationship with you. They are finding you as a trusted resource for their needs. If you keep providing value, they will step forward and then begin the journey from onlooker to customer.

Advertisement

Exposure takes discipline. Keep putting out valuable content. Gain exposure in whatever mediums you can. But don’t attempt to do it all! Strategically put yourself in front of your intended customers as frequently as possible.

3. Open to relationships

We know businesses are built on relationships, right? The suggestion here is to be open to relationships. Sometimes the value in connecting with someone can’t be seen right away. Perhaps in our attempt to protect our time and keep at bay the number of people that want to “pick our brain,” we may not be remaining as open as we might think. If you have all the business you need right now, maybe this is not the most essential element for you. However, it also holds the greatest possibility of a pretty immediate return.

There’s no doubt you’ve had the experience of a random meeting leading to something — a chance meeting or moment of synchronicity. It may have led to immediate business, a great introduction or the building of a relationship. It has also been the story of great romances.

The point is, we don’t always know what’s around the corner and who we might meet. If you remain open to relationships, you increase your willingness to put yourself in situations where a beneficial meeting of the minds, or heart, just might occur.

Even now, quite sometime after the lockdown and pandemic, many people are not as actively interacting with other people. Perhaps they’re not going to networking events or attending professional meetings, leaving themselves less open to relationships than is best for business growth. Create as many opportunities for something good to happen as possible!

Related: 4 Steps to Getting More Clients Right Now

4. Promotional

Promotional efforts will tend to be paid advertising with anticipated shorter-term results. It could be paid ads on social media, email marketing, marketing pieces or any effort where you are expecting a bit more of a direct ROI.

Promotional efforts are a good balance to other efforts and satisfies the desire to take action now and hope for more immediate results. That’s not to say it’s always a short-term strategy. An entire business can be driven by paid and unpaid promotion over a long strategy. The difference is, for promotional effort to be effective, there is typically a need to closely monitor the ROI, whether it’s return on money or time invested. A proactive promotional strategy assures that you’re taking action towards your goals.

5. Lead magnets

The concept of a lead magnet says it all. You are leading a prospect to a deeper relationship by offering something truly magnetic. It’s a point of direct value exchange. You provide value. The potential customers opt-in to a more committed relationship with you, at least in the form of providing an email.

The goal here is clear and intentional. You are leading a prospect closer to you through an exchange of value. It’s like the ask in a sale. If you don’t ask, rarely will you get. If you don’t lead, you’re not offering your expertise. Or as Wayne Gretzky famously said, “You miss 100% of the shots you don’t take.”

The goal of a lead magnet is a direct request, or exchange, to open up the channel of a prospect to becoming a customer. This more direct action is an excellent balance to other actions that are longer-term.

Advertisement

6. Exceptional

What’s the absolute easiest way to get more customers? Make the ones you have insanely happy by being exceptional. Yes, exceptional.

Anything less than exceptional may not be enough to make your business memorable or to inspire referrals. This also requires a system to maintain your existing customers and to inspire referrals.

To feed this potentially bountiful system of getting customers, I highly recommend carefully tracking and constantly implementing strategies to increase customer loyalty and referrals. It’s often the lowest hanging fruit, and it can reward you with the quickest results.

Related: Want More Customers? Get Quality Referrals From Existing Customers

As a good system should be, this is about a healthy balance. Amongst these six essential elements are efforts that will pay off in the short term and in the long term. Consider these six elements like a checklist or elements of a healthy ecosystem. When each element is taken care of, you create a consistent flow of incoming customers now and in the future.

Business Strategies, Entrepreneurial Advice & Inspiring Stories are all in one place. Explore the new Entrepreneur Bookstore.

Continue Reading

Business

Exclusive: MTD for VAT: 7 tips to help clients with Making Tax Digital – TalkOfNews.com

Published

on

By

MTD for VAT: 7 tips to help clients with Making Tax Digital

#MTD #VAT #tips #clients #Making #Tax #Digital

Got new or existing clients looking to change their processes so they adhere to Making Tax Digital for VAT?

With all VAT registered businesses having to follow Making Tax Digital (MTD) for VAT rules, the number of clients you need to help in this area will increase (if it hasn’t already).

To help you support your clients with MTD, we’ve created this article.

It covers the benefits of digital working and how to educate your clients on how they need to submit their VAT Returns, and plenty more too.

Plus, discover how your practice can save time and money with this ROI calculator.

Here’s what we cover:

Which clients does Making Tax Digital for VAT apply to?

How to encourage clients to move to digital ways of working

7 tips to get clients with Making Tax Digital for VAT

Advertisement

Final thoughts on Making Tax Digital for VAT

All VAT-registered businesses have to follow the Making Tax Digital for VAT rules.

Since 2019, MTD for VAT applied to businesses with a taxable turnover that was over the VAT threshold (currently £85,000).

The remit for MTD for VAT expanded in April 2022. Now, the rules also apply to businesses under the threshold that are registered for VAT (unless they’re exempt).

One of the key reasons for Making Tax Digital existing is to encourage businesses to adopt digital ways of working.

To resist this is not only to risk breaking the law but it also puts the business at a competitive disadvantage.

When attempting to comply with MTD’s rules, businesses that cling to old ways of working and rely largely on paper have to put in more effort than those that don’t.

But you can help your clients by communicating this to them, while emphasising the benefits.

Using HMRC-recognised accounting software means business admin tasks can be reduced from days to just hours.

It means businesses always know their cash flow position, so they can make smart decisions (and spot any problems before they become out of control).

And creating a VAT Return if the accounting data is already within the software is just a matter of clicking a few options, then perhaps applying adjustments, and clicking to submit the return.

Advertisement

It’s this positive and inspiring message that can often be buried underneath what seems to businesses to be yet another mandatory requirement from the government.

And it’s not just clients that benefit.

Making Tax Digital means that you, as an accountant, are in a better position to assist your clients and offer an even better service to them.

Start your clients on the journey today by helping them use software that’s MTD-ready and that will support all future MTD compliance requirements.

In April 2024, many sole traders will have to use MTD for their income tax. While from April 2026 at the earliest, incorporated businesses will have to use MTD for their corporation tax returns.

Here are seven ways you can help and support your clients with Making Tax Digital for VAT.

HMRC is relying on accountants to educate about the specifics of MTD for VAT.

Since you intimately understand the situations of your clients, this makes sense.

So how can you do this?

Here’s three easy and simple suggestions:

  1. Tack on information to the end of existing conversations. Use every client touchpoint as an excuse to educate, and ensure all members of your staff have the knowledge to do so. Some practices have even added MTD messaging to their email signatures to ensure it’s always included in communications. Updating your website and social media accounts is a wise move.
  2. Email blasts can keep your clients up to date. In fact, treating this just like a marketing campaign will pay dividends because you should be selling new or different service offerings that fit with MTD’s requirements and what your clients need. Treat this as an opportunity to sell increased awareness of what you offer.
  3. Webinars can help you reach lots of people. If you run the webinar as a Q&A session, the initial prep requirement is reduced too. Worried about being stumped by a difficult question? Let people know you may have to respond with an answer after the webinar. And video conferencing tools such as Zoom and Microsoft Teams are essentially free, easy to use, and widely adopted.

This might catch out clients who ask you to take care of their VAT Returns for them.

They might think they can simply forget about Making Tax Digital for VAT, and carry on as they always have.

Advertisement

But they’ve still got to keep VAT accounting records digitally, and know about the digital linking rules (no copy/cutting and pasting of key VAT data from one destination to another).

This might seem like an education issue. But it’s more than that.

You may need to help your clients adopt a digital solution that’s right for their needs.

At its most basic, this could be just a spreadsheet – although the MTD for VAT rules mean it needs to include more details than just input and output VAT amounts (for example, invoice-level details such as tax point dates, VAT rates, and so on).

But if the client uses accounting software that connects to your systems, which in turn makes producing VAT Returns much easier, it’s a win-win situation for both you and them.

When clients first hear that Making Tax Digital is going to affect them, you can expect four W questions in rapid succession: Why, when, who, and what.

The ‘when’ question is likely to be one of the most pressing that clients will ask of you because they’ll be afraid of getting penalised.

You can answer it very easily by providing deadlines for the client to meet. This includes registration deadlines, start days, and first filing dates, as follows:

When do clients sign up for MTD for VAT?

Clients shouldn’t sign up less than:

  • Seven days before their return is due; or
  • Five days after their return is due.

When do clients start using MTD for VAT?

For clients who file quarterly VAT Returns, these are examples of what start dates look like:

  • 1 April 2022: If the previous VAT quarter ended 31 March 2022.
  • 1 May 2022: If the previous VAT quarter ended 30 April 2022.
  • 1 June 2022: If the previous VAT quarter ended 31 May 2022.

When do clients first file VAT Returns using MTD for VAT?

Again assuming quarterly returns, these are examples of when initial VAT Returns for MTD for VAT must be filed:

  • 7 August 2022 for a VAT quarter beginning 1 April 2022.
  • 7 September 2022 for a VAT quarter beginning 1 May 2022.
  • 7 October 2022 for a VAT quarter beginning 1 June 2022.

Before clients can register for Making Tax Digital for VAT, they need to know which MTD-recognised accounting software they’re going to use. HMRC won’t let them proceed unless this is known.

The software can take different forms, depending on the client’s needs, and you should be prepared to help with solutions.

Some may choose to use bridging software with their existing spreadsheets.

Advertisement

Others may use their existing software but add in an MTD for VAT submissions module.

Then there are those who find their software is already MTD-recognised and they simply need to register for MTD, and then authenticate within the software.

Make sure your clients realise that. Just because the software is MTD-recognised, it doesn’t mean they are.

Helping clients with software is one of the immediate messages to communicate, because some may need to switch accounting packages if the one they use can’t be updated.

While you have to educate your clients about Making Tax Digital for VAT, you also need to cover myths, misinformation and incorrect assumptions.

For example, clients may assume there’s another soft landing period this time around for MTD for VAT.

In April 2019, this provided additional time for businesses to be less strict when interpreting the digital linking rules, meaning they could continue to copy and paste from one place to another.

However, there’s no soft landing period now for new adopters of MTD for VAT.

There’s a new penalty points system to consider too, which starts from January 2023.

By far the biggest misconception will be that MTD doesn’t apply to your voluntary VAT-registered clients (it does, of course).

There might also be beliefs that businesses can opt-out of MTD for VAT, with clients perhaps having heard about digital exclusion.

Advertisement

But this is limited to exceptional individual circumstances, such as where somebody lives in a location without internet access, or for people who can’t use technology because of physical or mental impairments.

Education on Making Tax Digital for VAT may be just the first step for you to take with your clients.

You may need to help some of them translate their existing processes into ones that are compatible with MTD for VAT.

If invoices are created outside the accounting software, for example, the details need to be entered into the system to be compliant with the digital records requirement.

This needs to be something that always happens for each and every invoice, otherwise there’s a risk of penalties from HMRC.

Key to helping clients create MTD-compatible workflows is identifying the points at which accounting data is generated or manipulated.

Typically, this will be at the point at which sales and purchases are made.

In this instance, ask your clients when paperwork is generated for VAT purposes, because it’s that VAT data that needs to be captured (such as tax point, VAT rate, VAT number and so on).

It’s when they receive receipts, bills and invoices, for example, that they’ll need to be aware of MTD for VAT’s requirements.

Having gained experience from the 2019 rollout of Making Tax Digital for VAT, you can segment clients into lists that will determine how and when you help them.

You might segment out those that need help first (such as monthly VAT filers), or those that are more technically savvy and will perhaps need less help overall.

Advertisement

And it’s likely that some of your clients will embrace MTD for VAT more wholeheartedly than others, who may consider it a difficult and painful process.

So why not leverage the clients that can in order to help the clients that can’t?

There’s a number of ways you can do this, such as via client get-togethers (in person or online).

Some practices even run their own private online chat forums on their websites, where clients can gather to speak to each other.

Onboarding clients to Making Tax Digital for VAT might feel like a duty for accountancy practices, but it’s actually a way to increase exposure for what you do.

Savvy practices are using it as an opportunity to create new service offerings that are more aligned the way the business world operates nowadays.

Why not do the same?

At the end of the day, helping clients with new processes can be a rewarding experience in itself, and can help increase client confidence and satisfaction in what you do for them.

Editor’s note: This article was first published in January 2022 and has been updated for relevance.

Making Tax Digital: A practice survival guide

Need support with Making Tax Digital, for your clients and your practice? This free guide will help you get ready for MTD for VAT, Income Tax Self Assessment and Corporation Tax.

Download your free guide

Advertisement

Continue Reading

Business

Exclusive: Housing shortage starts easing as listings surge in June – TalkOfNews.com

Published

on

By

Housing shortage starts easing as listings surge in June

#Housing #shortage #starts #easing #listings #surge #June

A “For Sale” sign is seen outside a home in New York.

Shannon Stapleton | Reuters

A historic housing shortage brought on by the one-two punch of slow construction and strong pandemic-induced demand is finally starting to ease.

Active listings for homes jumped 19% in June, the fastest annual pace since Realtor.com began tracking the metric five years ago. And the number of new listings during the month finally surpassed typical pre-Covid levels, up 4.5% from a year ago. Overall inventory, however, is still about half pre-Covid levels.

Some markets that saw the biggest surges in demand during the pandemic are now among those seeing the biggest gains in supply: Austin inventory was up close to 145% from a year ago, Phoenix was up 113% and Raleigh up nearly 112%. Other markets are still seeing supplies fall: Miami is down 16%, Chicago is down 13%, and Virginia Beach is down 14%.

“We expect to see additional inventory growth in July, building on accelerated improvements seen throughout June,” said Danielle Hale, chief economist at Realtor.com, adding that the supply gains increased as the month progressed.

And Hale said even more homeowners could decide to sell, adding new supply as buyers grapple with higher costs and difficulty finding homes that fit their budgets. 

Still, the expanding supply is not easing sky-high home prices yet. The median listing price in June hit another record high of $450,000 according to Realtor.com. Annual gains are moderating slightly, but still up almost 17%. That’s partly because the share of larger, more expensive homes is rising.

Advertisement

The costs of owning the median-priced home in the second quarter required 31.5% of the average U.S. wage, according to a new report by ATTOM, a property data provider. That’s the highest percentage since 2007 and up from 24% the year before, marking the biggest jump in more than two decades. Lenders generally see a 28% debt-to-income ratio as the ceiling for approving a mortgage. It’s why some potential homebuyers today are no longer qualifying for a mortgage.

As a result, the affordability of buying a home in the second quarter dropped in 97% of the nation, according to ATTOM. That’s up from 69% in the same quarter a year ago, and the highest reading since just before the housing crash in the Great Recession.

ATTOM calculates the affordability for average wage earners by determining the amount of income needed for major home ownership expenses on a median-priced home, assuming a loan of 80% of the purchase price and a 28% maximum debt-to-income ratio.

“With interest rates almost doubling, homebuyers are faced with monthly mortgage payments that are between 40% and 50% higher than they were a year ago — payments that many prospective buyers simply can’t afford,” said Rick Sharga, executive vice president of market intelligence at ATTOM. 

A few factors could thwart the continued growth in inventory levels, including a pullback from potential sellers who might decide to wait for the market to strengthen again. Still, Hale of Realtor.com noted that new and pending home sales were up this month, so some people might feel now is time is right to buy.

“As expectations of higher future mortgage rates rise, today’s home shoppers could be more motivated, especially now that they’re seeing more options to choose from,” Hale said. 

Continue Reading

Exclusive

Copyright © 2022 Talk Of News.