Is it finally turning to a buyer’s market? We’ll take a look at that today, but first let’s hit interest rates.
I remember my first year in the business, our sales manager came down the stairs to a sales meeting with a paper in his hand, and he said, “Guess what? You guys, we can tell people that we can get six and a quarter. Get this out to everybody. Can you believe we can get six and a quarter interest rates?” We were blown away. Then a year and a half before that it almost touched 9%- that was in 2000. It hit eight and three quarters and then started to tumble back down.
So rates are still competitive. Some volatility is predicted because of inflation, which means they might bump around a little bit. We’re advising clients right now to set up the loan how they like it with the preferred rate. And once they’ve got it set up with a structure that works, lock it. That way if you’re in the middle of a loan and the rates go down significantly, you can always look at getting a better interest rate. But if you don’t lock it and rates go up, then you’re stuck.
Are we turning it into a buyer’s market right now?
We’ve talked to a lot of realtors, and as they put in offers they see how long it takes for those to get under contract. They really do have their finger on the pulse of the market and I hear pretty universally right now that they are seeing a change—they’re seeing inventories increase and they’re seeing homes remain on the market a little longer.
I talked to some clients over the past six months who said, “I’ll wait for rates to go down”, and we won’t tell anybody that’s a bad decision. However something to consider is if everything else is in place and you just don’t like the interest rates, then it’s not a bad idea to jump in and pick up the house that you’re looking at. Then you can set it up the way you like it with what’s available, and there are really two things that could happen down the road. Rates could go up a lot further, or rates go down, and you can always look at the possibility of refinancing.
There’s usually a reason for why you need to buy, and as you go forward (if you’re thinking long term), it takes away a lot of possible problems for a short term change in rates or property values.
Another thing to consider is that the fact that most mortgages are for 30 or 15 years. Sometimes when closing on a mortgage it can be easy to think, “Well, now I’ll have this for 30 years.” And you can, but most people don’t hold their loan for more than just a few years.
We always say, ”Let’s look at what mortgage products are doing at the time, because they’re always changing.” It’s very likely that two or three years down the road the mortgage situation in the marketplace, or products that have come out may fit you better than today’s mortgage products.
Also, with prices going up a lot over the last few years, it is more of a challenge providing the percentage down payment. But there are a lot of programs that can help with that down payment. For example, there’s still zero down payment programs, 3% down payment programs, and 5% down payment programs. FHA is still at around 3.5%. So if you’re a veteran, there’s zero down payment there. If you’re looking to buy a home, there is opportunity out there, and great loan programs. So feel free to reach out, and let’s see if we can’t help you get a sweet mortgage deal!
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