Market Conditions With Mortgage Melissa Maxwell
Market Conditions With First State Bank Mortgage Melissa Maxwell
We’ve got some great topics for you today. We will talk about the new construction market conditions and what the economy is doing currently, but first, Melissa will talk about some cool stuff with us.
Increasing Rates and Misconceptions
We hear this a lot, and let’s just put it out there. This is the elephant in the room. People turn on the news, and all the real estate professionals either take it one or two ways. We either cringe because the rates are going up, or we relax because the rates are going up. The ones that are relaxing are the ones that have done this for quite some time, or the seasoned veterans if you will, because we’ve seen this before. Still, there’s a massive difference in what we’ve seen before versus what we’ve seen now in the market, and for a prime example of that, Melissa has provided us with a map, a graph, I should say, of what the rates have done over the last years. I mean, it is interesting to see when you look at how things have progressed since the 80s.
We are nowhere near that at this point in time. One of the biggest things was the swiftness that rates increased over the last several months. That was a bitter pill to swallow for many people, and it did affect a lot of people that have been in the middle of building, as you know, with regards to qualifying. It’s just important if you are in the process of looking, please stay in touch with your mortgage lender. Make sure that you’re staying on top of numbers and make sure that you’re not buying outside of your qualifying range at this point.
Where Are We Now?
It is interesting to see on that chart where we were, where we’ve been, and where we are now. It’s not bad. Absolutely, it’s not bad. We’ve been in such a low environment. I was not going to put that out there. We’ve been in it for a while. Something’s going to change. Something’s going to be different. Supply and demand, it’s everywhere.
We increase the base price, which is due precisely to the market conditions, supply and demand, product availability, and product pricing. Some folks are interested in buying a house now, and they’re buying at the top of the fair value of that home. Maybe they’re paying ten percent over what that house is truly worth. It will take a while to recoup that fair value where new construction, first in best investment, has always been the motto in my business only because you get in early and reap the benefits of every incremental price increase.
Do You Have a Little Bit of Flexibility and Fair Value?
You have a little bit of flexibility and fair value when you close. Maybe you do lock-in at the then-current rate, but you may be able to refinance out and maybe get rid of some PMI when it’s going to take you a little bit of time to do that. One thing I want to bring up too is interest rates because these are coming back into play. Adjustable-rate mortgages are a great option. You know we even have seven and year arms. Those are starting to come back into the mix. Extended lock time frames are also available for new construction. You can buy that. You can log in for months. If you’ve got somebody you’re concerned about, you know where they’re sitting right now and qualifying, that can give them a little bit of peace of mind, but that’s good to know.
New Home Construction Pricings
We expect that new home construction pricings will be doing the same thing. So, that same home at two seventy-five didn’t wait, and you still walk into that interest rate going up almost two hundred dollars a month, and that can be a make or break for qualifying a purchaser on debt-income ratio.
Well, one good thing about new construction, which I’m sure you guys have had a lot of, is if you’ve got people who have been out in the existing home market. When you come to build, you’re not clamoring over different offers, this and that, waving inspections, waving this, you’ve got a little more of a secure transaction. Absolutely, when you’re coming in to build, we appreciate those buyers that have unfortunately gone through that, but they come in at the end of the day, and they’re like “why didn’t you do this three months ago?” You don’t expect something you didn’t know or expect it to be that way, you know?
Conclusion
There are just so many things that can be hidden, and I hate that for that, but we’re thankful for those who have come in, that have been through that experience like Shelley said. If you guys are thinking about purchasing, but you’re on the fence, the message today is “don’t wait.” There has never been a better time to buy a home. I know that sounds crazy, but yesterday was better than today, and the day before that was better, and so every day that you wait is just another day that you’ve missed out on what could be building your wealth. Thank you guys so much. Hopefully, this was some great information. I know I learned a few things today from Melissa.
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