I Saw the Sign… Purchase Applications Rising Sharply
The recent rise in purchase mortgage applications reminded me of a 1993 hit from the group Ace of Base, which was about opening your eyes, seeing the signs, and acting on what you see. We have seen mortgage rates begin to make another run to lower levels from their 8% levels just several months ago to now slipping under 7%. Housing prices continue to rise, but at a much lower pace, and housing inventory continues to be tight, which means that any ideas of housing prices falling back to lower levels in the near term are simply pipe dreams. The Federal Reserve is now beginning to talk about potential rate cuts in the future, with predictions ranging from 3-6 cuts this year. We are also seeing, once again, multiple bids being offered on homes that may have sat for 30+ days before, and we are now getting these multiple bid offers. I truly believe that we are beginning to see real-estate sales start to pick up once again, and as rates move to lower levels, we will see even more buyers enter the market, pushing prices higher. While I have been saying that many folks are having a difficult time wanting to move from their current homes with their below 4% mortgage rates, the closer we get to breaching back below 6%, many of these folks will place their homes for sale to move to a new home. On the surface, this sounds good for our current inventory problem, but the reality is that while their homes will come on the market, they will now be among those looking for new homes. The inventory issue will not be resolved, and housing prices will continue increasing. Buying now is probably a good idea as home prices could rise by another 5% or more by the end of the year. If rates continue to slide to lower levels throughout the year, many will have the opportunity to refinance to lower rates. Acting now could save you money in the long run. Buy now, refinance later with no lender fees. The “signs” are there; do you see them?
Remember… The BEST RATE… IS A LOCKED RATE… with a float down… ask me about our program that allows you to lock your rate and then float down if rates move lower.
Make sure you (or your buyer) get pre-approved before looking at homes so we can determine if you are looking in the correct price range and have you armed to submit an offer with a pre-approval letter!
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Blog post date: Thursday, March 7, 2024
