Housing Market Update - October, 2022
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Almost immediately after the Fed raised the rate on September 22, mortgage rates went up further, touching into the 7% plus range as an average in the US.
We all thought lenders built this in, but the talk about continuing increases really led them to react even more. Here's Brian Woltman, producing Branch Manager at Embrace Home Loans, to give us a mortgage minute and let us know exactly what's going on in our local market. |
BRIAN:
The Federal Reserve raised interest rates, and more importantly, after they raised interest rates, they said a few important bullet points.
They said they're going to continue to raiserates at the end of this year.
They're going to incrementally raise rates in 2023, and they see themselves pulling rates back in 2024.
So if you read between the lines, what they're saying is they feel like they're going to have inflation under control by the end of 2023, which means we may see rates start to come down towards the end of that year or into 2024, which is a great opportunity for people to refinance.
The average rate in America right now is a little over 7%. We've got products that embrace right now, they're still hovering around the fives. And, you know, the rule of thumb is every 1% of interest rates go up, a buyer loses 10% of their purchasing power. Every little bit matters.
Right now, this is a great opportunity to buy, because in a couple of years from now, we're going back to a situation where there's going to be limited inventory and there's going to be a lot of home buyers out there.
So, you deal with the rate now. Of course, make sure you can afford the home - that's the most important part.
But the inventory issue is the underlying problem. Interest rates are high, but it does not fix the lack of inventory that we haven't had for the last couple of years. So thank you so much for having me. I really appreciate it, it's good seeing you, as usual.
The Federal Reserve raised interest rates, and more importantly, after they raised interest rates, they said a few important bullet points.
They said they're going to continue to raiserates at the end of this year.
They're going to incrementally raise rates in 2023, and they see themselves pulling rates back in 2024.
So if you read between the lines, what they're saying is they feel like they're going to have inflation under control by the end of 2023, which means we may see rates start to come down towards the end of that year or into 2024, which is a great opportunity for people to refinance.
The average rate in America right now is a little over 7%. We've got products that embrace right now, they're still hovering around the fives. And, you know, the rule of thumb is every 1% of interest rates go up, a buyer loses 10% of their purchasing power. Every little bit matters.
Right now, this is a great opportunity to buy, because in a couple of years from now, we're going back to a situation where there's going to be limited inventory and there's going to be a lot of home buyers out there.
So, you deal with the rate now. Of course, make sure you can afford the home - that's the most important part.
But the inventory issue is the underlying problem. Interest rates are high, but it does not fix the lack of inventory that we haven't had for the last couple of years. So thank you so much for having me. I really appreciate it, it's good seeing you, as usual.
MARIE:
Thanks, Brian. For an honest look at what this all means for us here locally, if you'd like an update on our local housing market as well as today's rates since September 22, I invite you to my October local market update.
It includes the third quarter and a look forward at how things have been since the rate increase. Tune in!
Thanks, Brian. For an honest look at what this all means for us here locally, if you'd like an update on our local housing market as well as today's rates since September 22, I invite you to my October local market update.
It includes the third quarter and a look forward at how things have been since the rate increase. Tune in!
