Real Estate Tech Trends

How are buyers searching for property? Where do buyers/sellers come from and what information do they find useful? How important is communication and what is the role of technology? These are just some of the questions answered in a commentary by Properties Online Inc. Click the link below and check out one of the most informative articles you will read this year.

Here are some quick stats from the piece:

• Mobile apps and searches increased over 400% from 2012 to 2013
• Searches in newspapers have dropped over 50% from 2007 to 2013
• Roughly 80% of buyers found pictures and detailed property information very useful in their search versus just 19% using videos
• Over 50% of buyers/sellers chose a Realtor from referral or past use
• There are some very interesting statistics from California (maybe where we are heading) about where buyers/sellers found their real estate agent
• Communication and expected response time from buyers/sellers might surprise you
• Social media must become a tool for you (Facebook is currently king)

It’s worth a 5-10 minute read. Click below. Have a great week!

http://propertiesonline.com/Reports/annual-real-estate-trends-report.pdf

Are You Ready

This week I asked a Realtor friend of mine how things were going.  She said her business had definitely slowed down and that the lack of inventory was certainly limiting her potential buyers from engaging in contracts right now.  But she also said that she was being very productive in mapping out a plan for next year and beyond.  She is being coached by another Realtor, who is a top national producer in another state, on ways to improve her daily activities to produce better results.

What about you?  What are you doing between now and the end of this year to prepare for next year – so that it will be your best year ever?  Here are some thoughts:

• Hire a coach of your own to make recommendations of things you need to get better at or stop doing
• Attend a seminar or workshop on selling fundamentals
• Commit to reading books or other material relevant to your occupation
• Get in shape
• Call everyone in your database to wish them happy holidays or provide something of value to them
• Analyze your daily routine to see where you can spend more time devoted to the things that make you money versus those that don’t.

These are just a few items of a much larger list of things you can be doing right now to get better. The projections from NAR indicate that next year should be very similar to this year from a number of sales standpoint (projecting 5.1-5.3 million in total sales; this year’s number should be right at 5.1 million). So there is likely not going to be more houses to sell than what we had this year. That means to have a better year in 2015 than you had in 2014, you are going to have to be better than you were – and better than those that do what you do. Don’t just ease into the new year casually because "it’s the slow time of year." Take it by storm!  Now is the time to get ready to make 2015 the best year ever!!!

Real Estate is a Commodity - Let's Not Forget That

I love my home and I love helping others get their own home. For most of us, it is not only the place we live and raise our families, it is our largest asset. So before we get too far removed from the nightmare that took place with the drop in real estate values starting in 2006, let’s remember what real estate is and treat it accordingly – at least from a valuation standpoint. Over time, home values have consistently risen – a quick look at the numbers below (taken from the National Census Bureau) shows that the beginning of every decade going back to 1940 reflects values have risen to a figure higher than the decade before. Sometimes the increase in value from a percentage basis is impressive and sometimes not so impressive.

Something I found interesting, particular from the information below, is how drops tend to follow spikes or vice versa – even when viewed decade over decade.   Today, we are still sitting well above the average trend line of appreciation going back to 1970. Click the link and you will see what I’m talking about: http://www.jparsons.net/housingbubble

In other words, there is room for values to drop from current levels and still maintain a consistent increase going back over the last 4 decades. I’m not saying they will, but I would also argue that it isn’t catastrophic if they do. Following the huge run-up in prices from 2000 to 2010 (and that even includes the significant drop from 2006-2010), it would make sense that the decade of 2010-2020, would see much more moderate appreciation numbers.

The point is this: Real Estate is a commodity - tread cautiously, remembering that values have always risen over the long term, but that doesn’t mean they always rise. There are spikes (an update I did not too long ago trumpeted the gains we’ve seen here in Nashville since the beginning of 2012), and there are drops (2006 – 2011). Right now we are on a run and values have been rising at a good clip. But the world is not coming to an end if that slows down. Honestly, it might be a good thing.

Average Home Values in the U.S.:

1940 - $30,600
1950 - $44,600
1960 - $58,600
1970 - $65,300
1980 - $93,400
1990 - $101,100
2000 - $119,600
2010 - $180,000
Today - $213,000

Percent increase decade over decade:

1940 to 1950:  4.6% annualized
1950 to 1960:  3.1% annualized
1960 to 1970:  1.1% annualized
1970 to 1980:  4.3% annualized
1980 to 1990:   .8% annualized
1990 to 2000:  1.8% annualized
2000 to 2010:  5.0% annualized
2010 to 2014:  4.5% annualized

Solve the Problem Before it's a Problem

Obviously this is not a new concept. Most of the best solutions to life’s issues are tried and true - there is no reason to reinvent the wheel. To fix the complications that exist in most business processes, I think this is the easiest solution, when properly implemented. I know beyond a shadow of a doubt that the key to having an efficient process in the real estate world is dealing with potentially problematic issues before they become significant issues.

How many times have you been involved in a deal and find out two days before closing that there is a problem and closing will have to be delayed? From what my newer referral partners tell me, that seems to be the one thing that irritates their clients more than anything.

I want to go back again to something that I heard, and really felt to be the main takeaway from the top producer panel at the GNAR convention a couple of weeks ago. Every panel member, both Realtor and mortgage professional, has gone to great lengths to create a process that either eliminates problems or deals with them early in the process. I’ve mentioned before that I think my team has created a world class process (timeline and communication) for our mortgage clients. The driving force behind almost everything we do is eliminating confusion and problematic issues either before they happen or at least early enough in the process that the issue isn’t last minute. Having in house processing, underwriting and closing are a HUGE help with this.

If you are receiving this email, then you are excellent at what you do (another part of my team’s overall process is to only work with referral partners who excel at their profession). You have the experience to be able to recognize possible issues early on in the sales cycle for every client. Have mini-processes (check lists work great) in place that help you with this and complement your overall process. Consistently recognizing complications and dealing with them before they become a last minute issue will separate you and your reputation from your competition.

Get Some Help

I have had at least three different conversations in the past month (2 with Realtors and one with a financial planner) who were all explaining to me their desire is to take their business to that "next level." In each case, the individual feels bogged down by the minutia of the daily routine of paperwork, emails, and general support type activities.

I asked each of them a simple question, “Have you considered hiring an assistant?” All said “yes”, but none had put a plan together to make that happen. Everyone’s concern is what happens if business slows down and then paying for the assistant becomes overbearing? That thought process seems to me to be short-sighted and goes against the whole thought process of taking business to the next level.

While visiting with several folks and listening to different presentations this week at the GNAR annual convention, it became very clear to me. If you want to be exceptional in our business, and I believe it really applies to any sales job, you have to have great help. As a salesperson, I have one overriding responsibility – bring in new clients. It should therefore be my primary focus to spend my time and attention on activities that will do just that. The more time I spend following up on paperwork and dealing with the minutia of any process, the less time I have to build relationships with clients. The best way I know of to stay focused on those activities that are profitable is to have someone or a team of people helping me deal with the grind that takes place behind the scenes.

Fortunately for me, I have someone that helps me handle the “process stuff” that I don’t have time to handle. It doesn’t mean for me, nor does it have to for you, that you lose touch with your clients. It is just a situation where you can devote your time doing the things that create new business and not spending time processing current business. When I hired my first assistant years ago, it was only a part-time job for him. So there are ways to begin the process of hiring someone to help without diving in headfirst (but diving can work too). If you want to go to that next level, getting some help is the best first step.

A Personal Dilemma (Part 2) The Solution

I shared last week about my dilemma of the disconnection between what I’m selling and what the ultimate end user is buying. I sell service, but my customer, a borrower wanting a home loan, is buying a commodity. Earlier in the year, I had one of my best referral partners make this comment to me: “Mike, you provide better coaching and communication than any loan officer in town, but your rates are killing you.” He went on to tell me about another lender, who is actually a friend of mine, “He provides great service too, but he also has the best rates in town. That is an unbeatable combination. You only offer one of the two.” That statement has been haunting me for almost six months.

Knowing that home buyers want the best deal as their number one priority, I have spent the summer talking to numerous banks and mortgage companies comparing rates and fees. I want my clients, both referral partners and the borrowers they refer, to know that when they call me, they don’t have to worry about someone else offering a better deal. I’ve been giving my clients what I want to give, which is a great service platform. Now I’m also going to give what the client wants, and that is the best deal. So after much prayer and research, I have decided to move my mortgage practice to a place that will allow me to offer both, F&M Mortgage.

It is a win-win combination for everyone and I can’t tell you how excited I am to be able to offer this!

The Week Ahead
Looking ahead, there will be a summit on Saturday between EU officials and Ukrainian officials. This may lead to additional sanctions against Russia. In the US, the important monthly Employment Report will be released on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Before that, ISM Manufacturing will be released on Tuesday. The ADP Employment Change will come out on Wednesday. Productivity and ISM Services will be released on Thursday. Mortgage markets will be closed on Monday in observance of Labor Day.

The Week That Was
The US economic data released last week struggled to elicit a reaction in the market. Instead, investors focused on increased expectations for asset purchases by the European Central Bank (ECB). This news was favorable for US mortgage rates, which ended near the lowest levels of the year.

The ECB has a reputation for being tougher on inflation than the Fed, and monetary policy has been tighter in the euro zone than in the US. Recent comments suggest that the ECB is headed in the opposite direction, though. While an improving US economy has caused the Fed to wind down its bond purchase program, ECB officials have expressed growing support to implement an asset purchase program to counter weak euro zone economic growth. Investors have added European bonds to their portfolios ahead of this expected added demand from the ECB, pushing their yields lower. This has made global bond yields in other regions relatively more attractive, including US mortgage-backed securities (MBS). The extra demand for MBS has helped push down mortgage rates.

Recent data on the US housing market has been mixed. The Existing Home Sales report released last week showed nice improvement, while this week's New Home Sales data revealed a slight decline. The July Pending Home Sales report, which is a leading indicator of future activity, rose to 105.9, the highest level since September 2013. The National Association of Realtors (NAR), which issues the report, defines a reading of 100 as an "average level of contract activity".

Millennials Balk at Buying

I read a great article in “Real Estate and Lending Insider” about the significant shift in our market concerning first-time home-buyers (link to the article is below). Market conditions have improved greatly for home-buyers since 1984, yet first-time home-buyers are now more hesitant than ever to buy.

Check this out (2014 percentages based on data through May):

First-time buyers affordability index: 1984 – 64.9 | 2014 – 116
Interest rates: 1984 – 13.9% | 2014 – 4.1%
Mortgage payments as a share of income: 1984 – 28.2% | 2014 – 14.2%
Unemployment among 24-25 year olds: 1984 – 7.9% | 2014 – 6.9%
1st home-buyers as a share of the market: 1984 – 37% | 2014 – 27%

All the statistics indicate the market is more favorable for first-time home-buyers today than it was 30 years ago. Yet, the percentage of first-time buyers is down 10% from that point and even further when you consider that historically, the market has been closer to a 40% concentration rate of first-time buyers. Why are first-time home-buyers now so hesitant to buy? Couple of thoughts:

• Student loan debt is bogging first-time buyers down (see my weekly update on 7/28/14 - https://www.facebook.com/MikeSmallingMortgageAdvisor )
• They viewed the financial meltdown in 2006-09 from the front row – became the first group in a long time to realize that housing prices don’t always go up.
• They like renting and the lifestyle that goes with it.
• They are not ready to commit to the responsibility of home ownership.
• Qualifying guidelines are more stringent for obtaining a loan than they’ve been in a long time.

So what do we do?

We have to start providing more education to this generation on the benefits of homeownership and how to prepare for it – and it probably starts in high school, before they become jaded by debt (particularly student loans). But therein lies the problem: those that need to hear the message are so young that they won’t be potential homeowners for at least a half a decade or more. So there isn’t any money to be made educating that group – at least not now. Let’s do it anyway. It will cure a lot of ills and give us a pipeline of customers down the road.

http://martinhladyniuk.com/2014/07/11/hes-the-top-u-s-mortgage-salesman-his-daughter-isnt-buying-it/

If you are ever interested in reading prior weekly emails, please visit my Facebook page. Mike Smalling Mortgage Advisor

The Week Ahead
The conflict in Ukraine will remain a primary focus this week. The biggest economic report will be Retail Sales on Wednesday. Retail Sales account for about 70% of economic activity. Before that, the JOLTS report, which measures job openings and labor turnover rates, will come out on Tuesday. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Friday, along with Industrial Production. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.

The Week That Was
With a light slate of economic reports last week, the conflict in Ukraine had the greatest effect on mortgage rates. Shifting sentiment about the likelihood of escalation caused some market volatility during an otherwise quiet week. Mortgage rates ended the week a little lower.

On Tuesday, a Polish official suggested that Russia is massing troops on the border with Ukraine to prepare for an invasion. While there has been a lot of debate about the accuracy of this statement, just the suggestion was enough to worry investors. The concern centers around how the US and European nations would respond. Another round of sanctions would be expected. The level of uncertainty about the outcome of this conflict is very high.

Europe is still struggling to avoid another recession, and trade restrictions with Russia make this even more difficult. GDP growth in the euro zone has been just slightly positive for four quarters after several years of negative readings. Since slower global economic growth reduces future inflationary pressures, this has been favorable for mortgage rates.

A Great Story of Real Estate Success

It seems like we’ve been reliving one horror story after another for the past 6 years about people who bought a home in the 2005 – 2008 range and either lost it all or have been playing the waiting game, hoping to see their equity restored to the level where they purchased. I can’t even count how many clients I’ve counseled over the past few years who have nightmare stories like this. So I thought I’d share a quick story of real estate success!

We closed a loan in February of last year for a client that bought a home over in East Nashville for $240,000 (using an FHA loan). Without doing any significant renovations, he sold it this month for $350,000. Not a bad 18 months worth of appreciation (it’s over 30% annualized if you are doing the math). He was able to take the proceeds from the home he bought last year and buy another comparably priced home this month with an 80% conventional loan, eliminating the $250 per month mortgage insurance that he had been paying on the previous loan.

Is this an exception? Absolutely. But it sure is nice to hear stories like this versus the ones we’ve been hearing for years.

If you are ever interested in reading prior weekly emails, please visit my Facebook page. Mike Smalling Mortgage Advisor

The Week Ahead
The economic calendar will be very light this week. ISM Services and Factory Orders will be released on Tuesday. The Trade Balance and Productivity will come out later in the week. None of these reports are generally market movers. Investors likely will be more focused on events outside the US. The number of potential trouble spots around the world has increased. Growth fears in Europe, conflicts in Ukraine and the Middle East, banking troubles in Portugal, and a debt default in Argentina all could influence US mortgage rates.

The Week That Was
In a packed week, the two big economic reports were the main drivers of mortgage rates. The outperformance of the GDP data relative to expectations outweighed the small miss in the Employment report, causing mortgage rates to end the week a little higher. Last week's Fed meeting contained no surprises and had little impact.

Investors expected that the economy had bounced back during the second quarter from weather related weakness in the first quarter, but they were still caught by surprise by the strength of Wednesday's GDP report. The first reading for second quarter GDP, the broadest measure of economic growth, showed an increase of 4.0%, far above the consensus of 3.0%. In addition, revisions to the first quarter results caused improvement from -2.9% to -2.1%. Second quarter recovery was seen in nearly every area, including the key components of Consumer Spending and Business Investment. The GDP report was great news for the economy, but faster growth raises future inflationary pressures, which is negative for mortgage rates.

Friday's Employment report also showed continued improvement, but it fell slightly short of investor expectations. Against a consensus forecast of 230K, the economy added 209K jobs in July. The Unemployment Rate increased from 6.1% to 6.2%. Average Hourly Earnings, a proxy for wage growth, came in below the consensus. Bottom line, the sixth straight month of job gains above 200K was also great news for the economy, but because investors had anticipated even stronger results, mortgage rates declined following the news.

Home Prices Continue To Rise BUT, Is That All Good?

According to the latest report from Corelogic, home prices rose year over year for the 26th consecutive month in April. Furthermore, the Federal Reserve reported that due to rising home prices, household equity increased by $758 billion in the first quarter alone. While that is great for so many homeowners who lost a tremendous amount of equity in their homes during the Great Recession, what is it doing to home affordability now and moving forward?

According to a report just provided by Hart Research Associates, over half of Americans (52%) have had to make at least one major sacrifice in order to cover their rent or mortgage over the last three years. These sacrifices include getting a second job, deferring saving for retirement, cutting back on health care, running up credit card debt, or even moving to a less safe neighborhood or one with worse schools.What’s more, the report also showed that at least 15% of American homeowners are living in housing markets where the monthly mortgage payment on a median-priced home requires more than 30% of the monthly median household income. The 30% figure has always been considered  the maximum for rent/mortgage repayments.

Although mortgage rates are still very low, the three most common hurdles for buying a home (which are down payment, credit and tighter underwriting guidelines), especially among young people, still exist. The attached article indicates that ~84% of young people are delaying major life decisions due to the poor economy – and that the slow jobs recovery for them has made saving money difficult. That is likely to be a continued drain on home buying moving forward as first time home buyers represent around 40% of all buyers right now. Increased prices have also caused many investors to jump back on the sidelines as the great deals are no longer available, adding another drain to future home purchases.

So while rising values have certainly helped millions gain back lost value from the recession, it has created other challenges for new homebuyers moving forward.  The good news is that our market continues to be very resilient, still providing quality opportunities for progress.  But we are going to have to be on our A game going forward and continue to add value to our clients in the service we provide.  When we do that, we will continue to see personal success regardless of the market conditions.

Click to read the FULL REPORT

If you are ever interested in reading prior weekly emails, please visit my Facebook page: Mike Smalling Mortgage Advisor

The Week Ahead
This week, the biggest report will be Retail Sales, which will be released on Thursday. Retail Sales account for about 70% of economic activity. Before that, the JOLTS report, measuring job openings and labor turnover rates, will come out on Tueday. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Friday. Consumer Sentiment and Import Prices will round out the schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.

The Week That Was
Ahead of two major economic events, mortgage rates moved higher early in the week. When there were few surprises in either the Employment report or the ECB announcement, though, mortgage rates recovered some of their losses and ended the week just a little higher. This was the first weekly increase in rates in six weeks.

After slowing over the winter due to unusually severe weather, the economy has seen job gains above 200K over the last several months. This was the first time in 14 years that job gains exceeded 200K for four straight months. Against a consensus forecast of 210K, the economy added 217K jobs in May. The Unemployment Rate was flat at 6.3%. Average Hourly Earnings, a proxy for wage growth, were a moderate 2.1% higher than one year ago. The May Employment data was right on target with the forecasts in nearly every area.

The European Central Bank (ECB) took a middle of the road approach in easing its monetary policy. After weeks of hinting that further monetary stimulus is needed to boost economic growth, ECB officials announced a rate cut on Thursday. They also will implement measures to encourage bank lending. Investors were most interested in hearing about a bond purchase program, but ECB President Draghi essentially just suggested that they were holding this key option in reserve to use in the future if necessary. The ECB stimulus did cause bond yields around the world to move a little lower.

5 Questions to Ask Before Choosing a Real Estate Agent

US News had an article this week Click Here to Read addressing this question. I know this may be preaching to the choir a bit, but it made me think that anyone in sales should be proactive in any and all presentations they give to a potential client. As you read through this list, be thinking of ways that you can have these types of questions already answered. You may want to have them in writing and ready to hand to the client before the first question is even asked!

1. How long have you been in the business? Question behind the question: How much experience do you have working with clients who had the exact same need I have?
2. What geographic areas and types of properties do you handle? Real question: How qualified are you to sell my specific property in my neighborhood?
3. How will you communicate with me? Real question: Will you communicate with me exactly the way I want you to – when I want you to and using my preferred medium?
4. Can you share references?  OR Who can I talk to, that is doing what I am doing, that you have helped?
5. What will it cost me to sell this property?  Real issue: What is the bottom line $$ figure I will walk away with?
6. Bonus – my suggestion:  How will you market my property? Better stated: What are you going to do to earn the commission I’m going to pay you?

While these questions are specific to real estate, they apply, in some form or fashion, to all sales. Before meeting with a client, in person or on the phone, we need to have a game plan. It would be best in writing, so that you have answers to all of their questions before they are even asked.

If you are ever interested in reading prior weekly emails, please visit my Facebook page: Mike Smalling Mortgage Advisor

The Week Ahead
There will be two major economic events this week. The ECB meeting will take place on Thursday. Investors will be looking for news about additional stimulus measures. The important monthly Employment report will come out on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Earlier in the week, ISM Manufacturing will come out on Monday and ISM Services will be released on Wednesday. Construction Spending, Factory Orders, the Trade Balance, and Productivity will round out the schedule.

The Week That Was
It was a volatile holiday-shortened week. Mixed US economic data was roughly neutral for mortgage rates. Anticipation of additional stimulus from the European Central Bank (ECB) was favorable, however, and mortgage rates ended the week a little lower.

In the big picture, mortgage rates are primarily being driven by indications about the pace of global economic growth and the resulting implications for central bank policy. In the US, investors are still sorting out the negative impact of unusually severe winter weather, but they expect the US economy to show moderate growth in coming years. The outlook in Europe is less optimistic, however. ECB officials have indicated that conditions in the euro zone warrant additional monetary stimulus to boost the economies in the region. Investors expect the ECB to signal new measures as soon as next week. One possible action could be a bond purchase program, and the potential added demand from the ECB has driven bond yields around the world lower in recent weeks.

The report on Gross Domestic Product (GDP) is the broadest measure of economic activity. As such, the data is revised multiple times. Investors anticipated that the first revision to first quarter US GDP would change the slight increase of 0.1% seen in the first reading to a decline of roughly -0.5%. This week's report showed that the decline was an even larger -1.0% during the first quarter. Investors were not worried by the shortfall, however, since it was due to an unexpectedly large decline in inventories. If inventories drop in one quarter, it means that production, and thus GDP growth, will be higher in future quarters. Current estimates are for second quarter GDP growth of around 3.5%, which would mean an average of roughly 2.0% growth over the first six months of this year.

Generational Selling

This week I want to talk about communication.

Communication is the driving force behind any relationship. Regardless of the level of the acquaintance (friend, family, client, co-worker, etc…), the degree of the relationship will depend on the effectiveness of the communication.

Communication can come in several mediums (face to face, phone, text, email; and even TV, radio, and print from an advertising perspective). Effective communication, particularly if you are selling something, doesn’t come in a “one size fits all” action plan. In other words, we have to figure out how to relay our message to the receiver in a manner that he/she will best receive it. My friend Jim Holmes, with Tim Shaver and Associates Nashville Sales Training.com shared a great presentation with a group that I was a part of last week that does just this – teaches us how to communicate more effectively to an individual based on his or her generation.

For the first time in history, there are four different, yet clearly defined generational types – Veterans, Baby Boomers, Generation X and Generation Y. Each has its own set of distinctive characteristics and each has its own preferred communication mechanics. Let me encourage you to download Jim's presentation by clicking here GENERATIONAL SELLING.PDF (98kb) It may take a little longer to review than my normal weekly update, but I promise the material is worth the time to review. Happy selling!

If you are ever interested in reading prior weekly emails, please visit my Facebook page: Mike Smalling Mortgage Advisor

The Week Ahead
Next week, Existing Home Sales will be released on Tuesday, and New Home Sales will come out on Wednesday. Durable Orders will be released on Thursday. Consumer Sentiment and Leading Indicators will round out a light schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday. News from Ukraine could influence mortgage rates as well.

The Week That Was
Last week, stocks posted large losses and mortgage rates improved, as investors grew more concerned about the strength of the economy. The reverse took place this week. Better economic data and comments from Fed Chair Yellen boosted stocks and caused mortgage rates to end the week higher.

The economic data released this week was generally better than expected. The biggest report, March Retail Sales, rose 1.1% from February, which was the largest monthly increase since September 2012. Industrial Production, another important indicator of economic activity, showed a comparable increase. Weekly Jobless Claims held steady near the lowest levels since 2007. The Philly Fed manufacturing index jumped to the highest level since July of last year. Stronger growth is good for the economy, but it increases expectations for future inflation, which is negative for mortgage rates.

Dovish comments from Fed Chair Yellen on Wednesday suggested that the Fed is not in a rush to raise the fed funds rate. Yellen explained that the timing of rate hikes will depend on when the economy meets the Fed's goals for the labor market and inflation. According to Yellen, a great deal of slack remains in the labor market, and this calls for accommodative monetary policy. Because loose policy boosts economic growth, Yellen's comments were viewed as positive for the stock market, and investors shifted assets from bonds to stocks.