12/11/2023
There’s a TON of misinformation in the housing market right now! There are many buyers waiting for interest rates to come down 📉, but I wanted to share some information and articles that you might find useful. If you’ve been keeping up, rates have come down to around a 7% in the last 2-3 weeks! 🤯
I recently had a meeting with the Chief Economist for the California Association of Realtors. Below are the key takeaways 📝 ;
98% of CA homeowners are paying mortgages on time.
95% of owners have 20%+ in Equity.
9/10 homeowners have 30%+ equity.
This indicates that there WON’T be a major wave of foreclosures!
Interest rates should come down to the mid to high 6%’s, which should bring an additional 60,000 buyers into the market. That means more competition in an already competitive market. 🫣
Home values are expected to increase 6%! This is a win for you current homeowners as you should expect your equity to increase.
This means if the home is currently valued at $400,000 now, then in 12 months the value should be $424,000.
Inventory (homes for sale) is expected to remain low. This is driven by the fact that many homeowners purchased when rates were below 4% 🤯, and they’re looking at higher payments and lower affordability with the higher rates creating a “lock in” effect. Many of them will not be selling as they’re facing a “financial penalty” with higher rates.
What does this all mean for you?
If you continue to wait..
Home values will go up 📈 affecting affordability for you. You’ll be able to afford less house. 🏡
More buyers will come to market and multiple offer situations will become the new normal.
Rates may come down, but it is likely you’ll be over paying on a home if you decide to purchase!
So why should you purchase now vs later?
Your home value will increase over the next year, which is passive savings. Your equity is a “forced savings”, and working for you to help build wealth. Home ownership holds a number of long term benefits!
We currently have the ability to negotiate seller concessions! Sellers have been more open to buying down interest rates to assist with buyer affordability. This is likely to go away if there are multiple (between 2-10 offers) on each home which we anticipate when rates come down into the 6%’s.
If you purchase now, you have the option to refinance into the lower rate when everyone else is competing against each other for the same homes.
Remember 2021? There were multiple offers on EVERY home, buyers were going $20k-$50k or higher over list price to win, and waiving their protections to get their offers accepted! Want to do that but with higher interest rates?
Listen.. don’t take my word for it. Below are a couple of articles from various sources supporting what I’m explaining to you.
So think about it! 🤔🤔 Do you want to purchase when you have the ability to negotiate, or would you rather wait for “rates to come down” to compete with many other buyers and end up overpaying on a home?
There are strategies we can use to get you a lower interest rate!
Message me for more information! 📱
https://www.foxbusiness.com/personal-finance/housing-market-forecast-turnaround-2024.amp (https://www.foxbusiness.com/personal-finance/housing-market-forecast-turnaround-2024.amp)
https://www.car.org/en/aboutus/mediacenter/newsreleases/2023-News-Releases/2024housingforecast (https://www.car.org/en/aboutus/mediacenter/newsreleases/2023-News-Releases/2024housingforecast)
https://www.cbsnews.com/news/mortgage-interest-rate-forecast-2024-what-experts-think-will-happen/ (https://www.cbsnews.com/news/mortgage-interest-rate-forecast-2024-what-experts-think-will-happen/)
https://www.goldmansachs.com/intelligence/pages/us-mortgage-rates-are-forecast-to-stay-above-7-percent.html (https://www.goldmansachs.com/intelligence/pages/us-mortgage-rates-are-forecast-to-stay-above-7-percent.html)
https://money.usnews.com/loans/mortgages/mortgage-rate-forecast (https://money.usnews.com/loans/mortgages/mortgage-rate-forecast)
Mortgage rates are expected to stay elevated through the end of 2023, and they’re unlikely to fall below 6% in 2024, according to top U.S. housing economists.
