Tag Archives: Mortgage Rates

Mortgage Rates Expected to Rise in 4th Quarter

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Current 30-year interest rates stand slightly over 7%, with mortgage rates expected to rise in the 4th quarter perhaps another one percent. Buyers have sticker shock simply because they’d gotten used to 3% rates for such a long time.

Mortgage Rates Expected to Rise in 4th Quarter

Mortgage Rates Expected to Rise Further

Rates have doubled this year. Many buyers want to wait until rates come down because they do not like the new rates. However, this strategy may cost home buyers as rates are expected to rise in the 4th quarter and into 2023.

Some people believe the Fed isn’t as serious as they say and will stop raising rates. The Fed has stated their target for the rest of 2022 is to raise about 1.25% more. This was before the September inflation data came out that was higher than expected.

We understand why people believe the Fed may pause raising rates. Raising rates will cause a deeper recession, and there is no guarantee it is going to work. The alternative is to do nothing, and high inflation is worse for the economy and Americans in general.

The Fed is fighting inflation and a government that keeps spending. If you pump money into the economy, you guarantee inflation. The Fed would prefer we slow down government spending so they wouldn’t have to raise rates so much. We have a $31 Trillion dollar debt, and rising rates affects the interest payments on that debt. This is not a good position.

Stock Pickers

We believe the Fed will raise rates 75 basis points in November. The stock market may do well until we get closer to the Fed meeting. The 10-year note is currently just under 4% but may start to rise as we get closer to the Fed meeting in November. This is a scenario we’ve seen play out each meeting this year. If you are a stock picker, betting on the market prior to a Fed meeting has been good as long as you sold off a week or two before the next meeting.

Home Buyers

If you are a home buyer, buying sooner rather than later may be in your best interest. A 1% rise in interest rates steals about 11% purchasing power from a buyer. Home inventory is already low and getting lower after Ian.

Rent Vs Buy

We are hearing stories of rents for single family homes exceeding $5,000/mo. Some go as high as $7-10k per month.  That’s basically $60,000-$120,000 for rent for one year. While interest rates might seem high, the cost of rent is crazy right now. Today is one of those days where it is better to purchase versus rent. After a storm, people need quick housing. They immediately turned to rentals, but as that inventory dries up it may force people to purchase.

FEMA housing can’t get here soon enough. It should have been here by now, but it isn’t in any quantity. The battle is going to be getting damaged homes fixed up and ready to sell to meet demand.

Home Sellers

We are working with several home sellers to bring their home to market. Some have damage and some are fairly free from damage. Pricing is determined by how much flood restoration will be needed and/or wind damage. If you are considering selling, now would be a good time to call us 239-310-6500

Our market conditions are changing as inventory changes. Fairly soon interest rates may change too. Buyers and sellers who act sooner may have best success. We took a punch from Hurricane Ian, but it doesn’t have to keep us down. You have options.

Always Call the Ellis Team at Keller Williams Realty to discuss your options. The Ellis Team was voted the Best Team in Real Estate by News Press readers for the 9th consecutive year. Let us help you figure out the best way forward after Ian.

Best of Fort Myers 2022

Hurricane Ian Information

US-China Trade War Benefits Home Buyers and Sellers

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Remember all that talk about rising rates in 2019 and how it would impact buyers and sellers?  Rising rates absolutely impacted buyers in 2018 in a negative way, but we’ve gotten a reprieve of sorts in 2019 for various reasons.  The US-China trade war benefits home buyers and sellers, and we’ll explain how.

US-China Trade War Benefits Home Buyers and Sellers

Rates slipped back in the 1st quarter of 2019 because economic conditions didn’t warrant rising rates, and because inflation had been tame.  Back in April we wrote about rate drops as everyone speculated how long they might last. Rates are affected by economic news and wildcards, and a wildcard just happened.

As soon as China announced retaliatory tariffs on the US last Monday there was a flight to quality, which means investors put money into the safety of 10-year US treasury notes.  This drove the yield curve down quickly.  As we know, most 30-year mortgages are pegged to the US 10-year Treasury note so this trade war became an instant boom to buyers and sellers.

How long will this window last?  Your guess is as good as anybody’s.  If the trade war becomes protracted, it could lead to inflation as goods and services become more expensive.  Or perhaps companies will find suppliers in other countries and the effects will be minimal.  Because this could cause a global slowdown, it could tame inflation worldwide.

Some have suggested the US could devalue the dollar which would help trade imbalances and really put pressure on China.  To do this we could lower interest rates.  There are a lot of strategies in play right now, and nobody can predict what will happen with certainty.

Our best advice would be taking advantage of the low rates while they last.  They could be here for a little while or they could vanish like a blip on a radar screen.  With rates around 4%, buyers’ purchasing power is about 11% more than it was last year.  This opens more buyers for each home, and let’s buyers stretch higher if they need to.

Lower rates should also help the housing market.  Last year there was downward pressure on prices because of rising rates.  With rates lower again that pressure has abated.  Job growth has been stellar, so if rates stay this low, we could have a pretty good run with increasing home sales.

We’re not sure buyers understand the opportunity they have right now.  Sellers have the same opportunity, because when they sell, they usually buy another property.  Those sellers that sell and buy now will save big money on their next mortgage, if they act soon enough.

We’re not trying to be the expert and tell you how long this will last.  We are telling you there is an opportunity for those in a position to take advantage.  Borrowing costs can make a huge difference in the long-term success of your financial well-being.

There is more inventory for buyers now.  Many sellers couldn’t sell before because there was no place for them to go.  That may not be the case now.  Go to www.LeeCountyOnline.com and look around.  You’ll see more homes on the market than last year, and there are some excellent buys if you know where to look.

This website allows you to see all the homes on MLS in real-time.  No more waiting for days or weeks for new listings to appear on those other sites.  If a seller reduces their price, you’ll be the first to know.  Our website produces listings in real-time so you have a definite advantage.  The best listings go before they even hit those other websites, so you can beat out other buyers to hot new listings.

Our agents are out showing daily, so we know the best homes.  Give our agents a call at 239-489-4042 and we’ll be glad to help you.  If you have a home to sell, ask for Sande or Brett Ellis.

Let’s find you your next home before rates go up again.  We’ve got a window.  All we know is it’s open.  We don’t know for how long.

Good luck and Happy House Hunting!

Mortgage Rates Hit New Lows in October 2014

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Mortgage rates hit new lows for the year this past week as 30 year fixed rates averaged 3.97% The 15 year rate fell to 3.18%, and the 5-1 ARM sits at 2.92%

Mortgage Rates Hit New Lows

 

Mortgage Rates Hit New Lows

Forecasters have been prognosticating mortgage rates would begin to rise going into 2015 as the Fed tapers its bond buying program and most believe this is true.  However, we’ve heard fears of deflation and 10 year bond yields have fallen below 2%.  This is due to several factors including an economic slowdown in China, Europe, as well as fears of Ebola.  Ebola is one of those wildcards we’re thrown every once in awhile that makes it difficult to predict what will happen to the world economy.

Buyers are taking advantage of the dip in rates too as we listed and sold several homes this past week that sold in a day.  Buyers who have been shopping for any length of time are tired of getting beat out by other buyers for hot new properties that enter the market.

They’re also watching the interest rate market as a dip in rates means they can afford a larger mortgage with the same monthly payment with the new lower rates.  This is important in a rising price market like we have here in SW Florida.

When prices rise, it raises the monthly payment for a buyer if nothing else changes, or it drops them into a lower tier home if they cannot afford the higher payments.  Lower rates are a nice surprise, especially in a rising market.  Because home prices are expected to be higher next year than this year, and because rates are expected to be higher next year as well, it really pays to jump on that house when it hits the market and go after it hard.  Even if you overpay a little bit now, it can save you thousands in a few months when rates rise and prices rise.

At our team meeting this week our buyer specialists were talking about helping buyers in the $100,000-$120,000 range and how difficult it was for them as each home they were interested in had multiple offers.  Basically it’s come down to setting up alerts on the MLS and notifying our buyers instantly when a new home enters the market and writing an offer within hours.  Multiple offers are still a possibility, but it’s the only way these buyers are going to have a chance at landing a home.  They just can’t go higher and there is limited inventory.

This is happening in several price ranges.  We just had a home come on the market in the $450,000-$500,000 range and it went pending in one day and we have several more buyers begging for a call if anything happens on this transaction.  It’s good news for sellers and terribly frustrating for buyers.

Our advice is work with an agent who will study the market for you and guide you.  If what you’re looking for has limited inventory, jump on a new listing that fits your needs and will work for you, and is priced fairly in the market.  If it’s well overpriced you may not have to worry.  Some sellers are delusional even in a seller’s market and you just have to let those go.

However, the seller may not be as delusional as you might think in some cases.  If the property is unique or has something drawing you to it, chances are it may be drawing other buyers as well.  Views, extended lanais, or remodeled kitchens and baths might bring extra value.  You can’t just look at dollar per square foot.  Appraisers don’t work solely off that and neither should you.  Rather it’s best to make specific adjustments for certain items based on market conditions.

It pays to work with a Realtor that knows the market.  This is true buying or selling.  To search the MLS for free check  www.TopAgent.com  If we can help, please call us at 239-489-4042  Good luck and enjoy the interest rate break!

Good luck and Happy House Hunting!
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Ellis Team

Fort Myers Real Estate Agent

7910 Summerlin Lakes Dr

Fort Myers, FL 33907

239-489-4042