Hey everyone it’s Jamie Cavanaugh with a mortgage market update!
A lot of consumers are kicking themselves for waiting out the market and not locking in 45-60 days ago. I have news for you! Rates are still great! Sometimes it helps when we look at what rates have done historically over a longer period of time to put things in perspective. Check out this 50 year historical rate chart. See that TINY LITTLE uptick at the end? That’s the market change we’ve experienced recently. In the grand scheme of things it’s really not as catastrophic as the media would have you believe.
Early 2020 brought us some of the lowest interest rates in HISTORY. Ever. Hopefully many of you took advantage of those rates. If you didn’t – all is not lost. Rates are still fantastic. And there are more reasons to refinance than just to lower your rate. If you are looking to consolidate debt, mortgage rates are far lower than most revolving and installment rates. Thinking about pulling cash out for home improvements or even purchasing an RV to travel? Mortgage loans remain one of the least costly ways to do both.
Pivoting the conversation to the next hot topic – the purchase market. It is definitely heating up and we are seeing the strain on property appraisals with a shortage of appraisers, valuation challenges and lengthier appraisal turn times.
Many clients have asked the question: How can home prices be going UP and the housing market be SO COMPETITIVE when we’re still in the midst of a global pandemic that took many businesses out and left so many Americans jobless?
The answer is supply and demand. There are simply more people in need of houses than there are homes for sale. This leads to bidding wars, multiple offers, properties going into escrow higher than the listed sale price and comparable sales not keeping up with rapidly rising prices.
Depending upon area, experts are predicting a 3 to 11% property appreciation rate this year. One of the biggest contributing factor to this is Millenials are now starting families and buying their first home – causing demand beyond the current supply.
Why is the supply so low? Lots of reasons. One of the biggest is that many sellers are still hesitant to allow buyers into their homes due to Covid. There’s no telling when we will come out of this but let’s hope it is sooner than later.
So what does it all mean? It means that rates are still very low and equity is very high. This tells us that it is still a great time to refinance OR buy your next home.
Thanks for watching!