Inflation is in the driver’s seat.
We have seen mortgage interest rates continue to climb due to inflation. It was reported that year over year inflation is growing at a rate of 7.5%. Which means the cost of goods are allot more expensive this year than they were last year. The Federal Reserve has announced at the last meeting that they intend to raise their rate. The market wants to see the Fed combat inflation and it is prepared for higher rates and they are waiting. The more we wait the more volatility is in the market. Like signing a purchase and sales agreement with a 90 closing. Allot can happen. Sadly, something bad has happened. URKRAINE. The Fed now needs to factor in the Ukraine effect. This situation will add more expense to fuel and commodities and now opens up more inflation. They want to be accommodating but there will be a cost. A 50+ basis point or higher rate increase may stall the economy and put us on the road to recession. A .25-point basis point increase may have no effect on inflation. Tough place to be, I think the waited too long.
So, what does this mean for us. The saving grace for Real Estate is that property is selling as fast as they hit the market. We have a very small supply of available property, however year over year sales is on down a small amount. That means that property sells as quickly as it goes on. Very few staying on the market any length of time.
How can I help your buyers and sellers?
We want to help as many families as we can. With buyers I can explain the mortgage market, so they have a good understanding of the process and rate environment. Go through the approval process, collecting their vital documents and having the file completely underwritten, so their approval letter is subject to appraisal and title.
With your seller develop plan so if they are buying a new home, they will know that they are approved subject sale of existing home or provide alternatives so if they need to buy prior to sale of existing home, so they can proceed.
I hope this gave you some insight into the rate market. Please let me know if you have any questions. I am here ready to assist your clients on their journey to home ownership.
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