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Posted On Monday, 12 April 2021 23:20
Posted On Monday, 12 April 2021 23:13
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“Life holds a special magic for those who dare to dream.” Anonymous

This week homeowners and homebuyers saw home values continue to rise, and the mortgage rates dipped down for the first time since January. The seemingly unattainable dream of renovating your home to be your castle or restructuring your debt so you can retire suddenly became possible like the wave of a magical wand. 

Mortgage rates dipped about 5% this week for the first time since January 2021.  Home values increased 15.6% year-over-year.  The mortgage that the aspiring homebuyer could not afford last week suddenly became affordable this week

The Collinger’s dream of getting their children through college, and retiring within the next ten years seemed impossible.  This week, their home hit the highest value they had ever seen. At the same time, mortgage rates dipped back down from their recent climb.   Restructuring the other debt with a cash-out refinance with the high home value and low fixed rate, the Collinger’s could now do what they never imagined they could—get their older kids through college and set their sights on retiring in less than ten years. 

The Dennison’s dreamed of remodeling their home and opening up the kitchen and living room space, installing a gunite swimming pool, and converting the back patio area to a bar-b-que station to spend more quality time with friends and family.  They had attempted to get financing to achieve this dream over the years, but the home value was never enough, and the mortgage payment was always too high.   But, today, with a swish of the magic wand, all of these dreams, the Dennison’s are making a reality. 

If you have not explored selling your home and moving up, the low mortgage rate makes this step up much more affordable than you think-even with the higher price on the move-up home. 

In 2018 the Mueller’s explored selling their home and buying a bigger, more expensive home.  The payment buying the bigger, better home would have cost them $800 more per month on a mortgage—insanely out of reach. But, selling at the higher price now and locking in a much lower mortgage rate landed them their castle and only costs about $300 more per month.  Rising home value and the bottom bumping fixed mortgage rate was like the flick of the magic wand, and, viola’, they were in the beautiful dream home. 

What do YOU want to accomplish with YOUR mortgage?  Make Your Plan. Work Your Plan. If the deal works for you today, let’s do it today.   Let’s explore YOUR mortgage options.  

Connect with Jo Garner at www.JoGarner.com

Posted On Monday, 12 April 2021 00:00 Written by

Sometimes people allow fear to prevent reality in their lives. Sometimes people allow fear to paralyze them into inaction. I have always found it that if you look into the actual fear and find out why you are afraid, you sometimes see there is nothing to be afraid of.

We have seen a number of people creating a new dialog of fear around the potential of 2.7 million homes entering foreclosure due to the expiration of forbearance. The fear has even grabbed the government because they have chosen to kick the reality of expiring forbearance down the road another six months because they don’t have a simple answer to the question, “what happens”.

Well, let’s do some math. NAR says we would have an even more robust purchase market if we had more homes in inventory. They say they would like about 5 or 6 months of homes to create an “average & comfortable” market. Last year we sold 6.8 million units, or about 560K units per month. We have a much greater demand than that, but we could certainly be happy to get more houses in the market, and 5 months @560K per month would be about 2,800,000 homes. However, despite the inventory challenges, 2020 was the biggest number of home sales since 2006!

The new fear is if all the homes in forbearance go into foreclosure, it would destroy the housing market and collapse prices. However, some simple math may shed some light on the reality.

1. Of the 2.7 million homes, are all of them going to go into foreclosure? Given the rise in home values, why wouldn’t they just get sold?
2. Again, many people will pay the balance, refinance, or extend and modify their current deals.
3. If ALL the homes did become available, wouldn’t that supply of homes just supply the 5 or 6 months’ worth of “inventory the NAR says it takes to make the market more normal?

Yes, buyer demand makes the market a challenge, just like a few years ago the sellers were caught without buyers who wanted to buy.

Yes, given the failure of fully explaining and understanding forbearance, some people may have to sell their homes or may go into foreclosure. But given the current market, it is much more likely the resolve the issue or sell at a profit.

Not all 2.7 million homes in forbearance will end up on the market, but if they did, according to NAR, it would be welcome news for all the agents and people who are struggling with inventory!

Acknowledge the information and respect the fear; but do some math and find that fear may likely be very unfounded for many reasons once you look at everything and put it into perspective.

Questions or comments: This email address is being protected from spambots. You need JavaScript enabled to view it. 

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