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Posted On Monday, 19 July 2021 19:54
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I’ve been hearing from my clients and have read some comments by others that people are saying they are going to “wait” until home prices come back down and it’s more of a “buyers’ market” before buying their next home. That is an interesting thought, but it begs the questions:

• When will those prices come back down, and from what level and to what level will they go to?
• Will the come back down price be lower than it is today?
• What is the cost of your current housing doing?
• What will the cost to borrow be IF, and it’s a big if for a reason, if the cost to you to borrow LESS MONEY is higher than the cost of borrowing MORE MONEY is today 

You see, I am not sure who it is that is guaranteeing that home prices will fall below where they are today, and by how much they are guaranteeing those prices will fall? I’m not saying it can’t or won’t happen, I am saying the facts are it might not ever happen that home prices ever are lower than they are today; and I am certain that if they do, mortgage rates will be higher, maybe significantly higher, than you see today.

Let’s look at some numbers, we have seen home appreciation above 13% across the country, with higher rates at the lowest price points. Prices are still climbing even though we are seeing fewer offers on each property, multiple offers exist on 65% of all sales according to the MBA. Don’t ignore the fact that new listings are up 4% year over year, so please stop blaming inventory!

We also need to look at mortgage rates. With inflation, as measured by PPI at 7%, how long will it be before we see rates go higher? Most experts expect the first move in tapering FED activity is to slow or stop MBS purchases. Where do you think rates go when that happens? 4%, 5%, higher? What does the payment look like at higher rates? Even at lower loan amounts in the future if there is a drop in home prices; higher rates may still make buying today a better long-term deal!

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