Are we there yet? No, not just yet!
For months now we have seen social media and the “experts” share their thoughts on why rates would be going down significantly. This has caused many in our industry to predict lower rates and talk about 5%, even 4% or lower rates to come. The issue with that is that while lower rates may be in the future, many have hung their hats on this and are now suffering the fact that mortgage rates have yet to make that move as they had expected. While rates are certainly lower than they were last fall, far too may people are thinking about rates that are still far below where we can actually deliver today, and this is causing some people to miss out on opportunities to have bought a home and locked in a PRICE, while maintaining the ability to refinance later if rates do go lower and lower their PAYMENT!
The real issue is, while people have been putting off buying a house until the rates go lower, they have watched the cost of the homes they want to purchase increase by thousands, or even tens of thousands of dollars! Even with a lower rate, it may still cause a higher monthly payment because people will be forced to borrow more money because they waited for a lower rate. Buy when you want to buy, not when rates are low. When rates go lower, you will see more competition for houses, which can lead to further higher prices, meaning you have to borrow even more money…
When you are ready to buy, buy. You have locked in your price and your payment. If rates go lower, you can always refinance. In fact, many companies are offering a low cost or no cost refinance for their existing customers so they can take advantage if rates go lower. If rates don’t go lower, you have your home at a good price and with payments you are already comfortable with; and if rates go higher, you have secured your home and your payments!
The markets are digesting a less than favorable CPI report and we are facing initial jobless/continuing claims and the PPI numbers this morning, could be a market moving event so be watching. Questions or comments: This email address is being protected from spambots. You need JavaScript enabled to view it.
