Why are interest rates rising despite Fed rate cuts? Everybody thought when the Fed cut interest rate it would translate to lower mortgage costs. We’ll explain why it’s not happening, and we’ve been warning you for months about this.

30-year mortgage interest rates are more closely tied to the 10-year treasury note than anything else. The 10-year treasury note is forward of the Federal Reserve, meaning the note reacts faster than the Fed. The markets are telling us rates should not come down yet.

Interest Rates Rising Despite Fed Rate Cuts

The bond market does not like two things, and the government controls both. The first is deficit spending. The markets are telling us we cannot continue to spend like this. The bids coming in from the auctions are at higher rates because with more deficit spending there is more risk of nonpayment in the future. Additionally, there is no plan to balance the budget, let alone pay off the $35 trillion dollar debt today. This year alone we are racking up $2 trillion dollar debt. The US government will not be able to pay its debts in the future if nothing changes. It does not matter what rate the Fed states, the markets have to purchase the debt. The markets are speaking.

The second thing the markets do not like is inflation. Inflation occurs when there is too much money chasing too few goods and services. This is exactly what the government created by spending trillions of dollars. Real wages are declining, which means the pay raises people experienced couldn’t keep up with the higher inflation costs. People lose money on the deal.

Higher Borrowing Costs

If inflation isn’t bad enough, consumers are also hit with higher borrowing costs. Not only does that new home cost more to build, it also costs more to finance. It’s a double whammy, and our government did this to us.

We the people are just as guilty because who doesn’t like free money flowing into the economy? The only problem is, there is a price to pay down the road, and we are paying the price today. Politicians are afraid to tell us the truth or we’ll vote them out of office.

The government does not create jobs or wealth. The government simply borrows on our behalf, because they can and adds it to our tab. Then one day the financial markets speak up and say we need to see a plan, or we’re not going to keep loaning you money. At least not at today’s rates.

Related Data

I will post some related articles on our Blog that explain further how the markets view our debt, and why rates are rising. They’re too long to post here. Our Blog is located at https://blog.topagent.com It’s a great resource filled with every article we’ve written for the paper for the last 19 years. It’s interesting to go back to certain dates in time and see what the real estate news of the day was. People often ask me how the market was when they bought. This Blog has your answers, sorted by date.

10-, 30-year Treasury yields end at highest since July as deficit worries grow

Worries about deficit spending after election bog down U.S. government debt

Bond-market selloff leaves 10-, 30-year yields at almost 3-month closing highs

Buying or Selling

If you’re thinking of buying or selling, Always Call the Ellis Team at Keller Williams Realty 239-310-6500. You can search the MLS like a pro at www.LeeCountyOnline.com or find your home value at www.SWFLhomevalues.com

Brett and Sande have been voted Best in Real Estate for 12+ years by News Press readers. Put our knowledge and experience to work for you.

Good luck, and Happy Selling!

October SW Florida Real Estate Market Update

Let’s look at Pre-Hurricane Milton Housing Demand. We are writing this article before Hurricane Milton hits, so we apologize in advance to all those who are affected. We’re praying everyone makes it safe on the other side.

Pre-Hurricane Milton Housing Demand

Before the hurricane hit, housing has been soft with 6,269 single family homes currently on the MLS. We have 1,450 total pending homes which includes both pending and pending contingent. Buyers have been soft citing higher rates, waiting for the election, high insurance costs, etc. This is all indication buyers are less motivated because they have no fear of missing out.

After the Storm

We expect less homes to be on the market next week as some will suffer damage from the storm. If storm surge projections hold true, more home will receive damage than what Helene brought a few weeks ago.

In past hurricanes, a few things happened. First, less homes were on the market because some were damaged. It took people months or years to get their home back to sellable condition. Secondly, many displaced hurricane victims bought another home because their home was damaged. This took inventory down even further.

Damaged Field

There is a field in MLS regarding whether the home is damaged from the storm. I suspect we may be using that field again, so when searching make sure you know how to search on that field. This is something we can setup for you at www.LeeCountyOnline.com. Just e-mail us and ask us as it’s not a standard field available to the public.

New Flood Disclosure

Effective October 1 homeowners must now disclose previous flooding events.  The disclosure requires sellers to provide potential buyers with a form that details (if Applicable) any insurance claims the seller made for flood damage, as well as any federal assistance received for those claims.

Buyers want to know the cost of homeowners insurance, flood insurance, and the history of damages. This new disclosure will answer many questions buyers already have. I have a feeling many sellers will have to update this form if we see significant storm surge in the area.

Work With a Professional

 Who you hire matters. This is true on the selling side, and the buying side. A good agent can make sure you’re asking the right questions and seeking a bigger picture. More information is better if it doesn’t become analysis paralysis. Your agent should be able to help you sort out all the data so you can make a good decision for your family.

 

Let our family help your family! Always Call the Ellis Team at Keller Williams Realty  239-489-4042 You can get your home’s value online at www.SWFLhomevalues.com as well.

 

Be sure to keep up with the SW Florida Real Estate Market at our Blog. Blog.topagent.com Not only will you get today’s market stats and news, but you can also go back in time and see the news and stats from previous years. It’s always fun to see what was happening back when you last bought or sold a property and look it up.

Buckle up, stay safe, and remember to call the Ellis Team with your real estate questions. We’re here to help!

Today we want to provide a creative financing scam update to our May story “Creative Financing Red Flag Alert”.

Since May creative financing offers have increased in frequency, and they’ve become more creative. Additionally, after presenting their offer the callers have become more tenacious and downright combative with the listing agent.

More Creative

Since we wrote about how the “Subject To” can violate your lenders Due on Sale Clause, investors have changed the way they present their offers. One investor is hyping their offer as no risk because it is not “Subject To” at all but rather wrapping the mortgage to give the seller full protection. Whether you wrap a mortgage or not, it still may violate the original terms of the loan.

Furthermore, a seller is still reliant on the investor making the payment. If the investor does not make the payment, the seller may have no recourse to get their home back and be obligated to make the full payment of the loan. In a wrap-around mortgage, it’s possible for recourse to be created, but a seller might have to go through a lengthy legal process all the while mortgage payments need to be made. If the investor placed a tenant, the seller would have to abide by those terms as well.

Legal Advice

We would highly recommend a seller speak with an attorney before accepting any kind of creative financing offer. If they tell you you’re off the hook when you sell to them, look harder. Accepting a creative financing offer may prevent you from purchasing another home because you still have a loan in your name. They don’t tell you that, or they sometimes mislead about this fact.

The Ellis Team is looking into adding language into the listing agreement such that we have authority to reject creative financing offers for our sellers.

Agents Beware

These investor groups are so skilled and convincing that we’re afraid inexperienced agents, and perhaps some experienced agents may fall for some of the claims made over the phone, and in emails.

We have had sellers call their attorney and their lender. In each case, they were told not to engage in the offer before them.

I’ve even had investors point out that it is my duty to present all offers, and question why I wouldn’t want what is best for the seller?

Creative Financing Scam Update

As a service to the community, I will post screenshots of the written correspondence on our Blog. I invite attorneys and lenders to comment on the language. I will take out the address of the property and the names of the sender. It is our hope that you will begin to get a feel for what is happening out there. Please seek your own legal advice. We are not attorneys and are not offering legal advice in any way. We are simply informing you about a topic you might want to investigate before taking action should this happen to you.

Considering Selling?

Please call Brett Ellis or Sande Ellis 239-310-6500 at Keller Williams Realty. We can answer your questions and guide you through the real estate maze. Changes are everywhere, and you need an experienced agent to guide you through the process. Or get your home’s value for Free at www.SWFLhomevalues.com

Good luck, and Happy Selling!

Creative Financing Ehibits to View

The following are actual emails or offers we’ve received for you to view. We have blamked out who sent them and the property to protect privacy.

Creative Financing Exhbit 1

Creative Financing Exhibit 2

Creative Financing Exhibit 3

Creative Financing Exhibit 4

Creative Financing Exhibit 5

If for any reason you cannot open these links, leave a comment and I will find another way to share them. We are using Google Drive to share, but not sure if we can share outside of our organization