This duality was at the forefront of the recent discussions surrounding Jerome Powell’s statements regarding interest rates and the Federal Reserve’s monetary policy. As the Chair of the Federal Reserve, Powell’s words carry significant weight, and his stance on interest rates has far-reaching implications for the housing market and mortgage industry.

The Importance of Stability in Mortgage Rates

During the recent market update, Jaysen Barlow, a real estate professional with Sell for 1%, expressed gratitude towards Powell’s decision to refrain from lowering interest rates too quickly. Barlow’s sentiment echoes a larger concern shared by many industry experts – the fear of triggering another market frenzy akin to the one witnessed during the COVID-19 pandemic.

Cast your mind back to 2020 when interest rates plummeted from 4% to 2%, fueling a buying frenzy that caused home prices to skyrocket by as much as $100,000 in some markets. Such drastic swings in pricing not only make it difficult for buyers to keep up but also create an unsustainable bubble that eventually bursts, leaving both buyers and sellers in a precarious position.

By maintaining a steady course and avoiding drastic rate cuts, Powell and the Federal Reserve are attempting to engineer a “soft landing” – a scenario where the housing market gradually cools without plunging into a full-blown recession. This approach aims to strike a delicate balance, preventing a chaotic market collapse while also discouraging the kind of unchecked price appreciation that can price many potential buyers out of the market.

The State of Mortgage Rates

According to Ryan Cochrane of NFC Lending, a mortgage expert featured in the market update, interest rates have remained relatively stable over the past few weeks. Depending on factors such as credit profile, loan amount, and overall financial strength, Cochrane notes that buyers can expect to see mortgage rates ranging from the mid-6% to mid-7% range.

While these rates may seem high compared to the historically low levels seen in recent years, they represent a degree of normalization that many economists and industry professionals have been advocating for. By maintaining rates within a reasonable range, the market can gradually adjust to a new equilibrium, allowing both buyers and sellers to make more informed and sustainable decisions.

Opportunities in a Stable Market

Despite the perception that higher interest rates may dampen buyer demand, the current market conditions present unique opportunities for both buyers and sellers. As Jaysen Barlow mentioned, he recently experienced a surge in bidding wars for some of his listings, indicating that there is still healthy competition among buyers.

For prospective homebuyers, acting sooner rather than later could be advantageous. With spring traditionally being a busy season for real estate, buyers who secure financing and make their moves now may be able to avoid even steeper competition and potential price hikes as the year progresses.

Sellers, on the other hand, can take advantage of the current market dynamics by pricing their properties competitively and leveraging the existing buyer demand. While the days of rapid price appreciation may be behind us, a stable market allows sellers to showcase their properties to a pool of qualified and motivated buyers, increasing the likelihood of securing a fair and reasonable sale price.

The Takeaway

As we navigate the complexities of the housing market and the ever-changing landscape of interest rates and monetary policy, it’s crucial to remember that stability should not be mistaken for stagnation. Instead, it presents an opportunity for both buyers and sellers to make informed decisions and participate in a market that is gradually finding its equilibrium.

By maintaining a steady course and avoiding drastic rate cuts or increases, the Federal Reserve and policymakers like Jerome Powell are attempting to create an environment where the housing market can cool in a controlled manner, reducing the risk of a sudden collapse or an unsustainable surge in prices.

If you’re considering buying or selling a home in the current market, it’s essential to work with experienced professionals who can guide you through the process and provide valuable insights based on the latest market trends. At Sell for One Percent, our team of dedicated real estate experts is committed to helping you make informed decisions and achieve your goals in a stable and sustainable manner. Contact us today to schedule a consultation and take the first step towards a successful real estate transaction.

Check out our YouTube page for more!

The post Maintaining Stable Mortgage Rates: The Key to a Soft Landing appeared first on sellfor1percent.

Dave (00:03):Hey there everyone. Dave Barlow here with Sell For One Percent. We got the whole gang here today.
Everybody’s healthy, feeling better and looking sharp for the Christmas holidays. Let’s jump right into
interest rates. SB, what do you have for us?

Steve (00:22):
Well, happy holidays everybody. We’ve got some good news! Recently, the Fed here in the month of
December raised the interest rate for another half percent. When the Fed raises the rate like that, it
really doesn’t affect our mortgage rates except with the ARM products. With that being said, for the
seventh consecutive month that the Fed has raised the rate, this week our interest rates have held
steady, which is good news. Maybe a little more money in your pocket to get out there and do some
holiday shopping.

The 30 year fixed rate continues to be at 6.125%, the 15 year rate is 5.625%, and the
FHA rate this morning was at 6.25%.

Our interest rates are holding steady and according to
research, a lot of the economists, and a lot of the predictors, after we get into 2023, look for those rates
to drop back into the 5% area. So it’s good news if you’re getting ready to get into the real estate
market.

Dave (01:36):
Good news for home buyers for sure. We talked to Rich Cercone over at Equitable Finance last week, and
Rich said that a lot of the mortgage rates are predicated on what the economy is doing. The consumer
price index, looking at inflation rates and so on and so forth. So they already knew the half point raise
was going to come from the Fed that was already built into expectations. So when the CPI came out a
little lower than expected, it pulled those interest rates down some. So again, good news for home
buyers. The other part is that the inventory levels have continued to be around 3000, and we’ll talk
about that a little bit more. There are also more homes on the market which results in interest rates going
down. I can tell you that my sellers are open to helping with closing costs. So, we haven’t seen that in
about two and a half, three years that a seller is actually saying, “Hey, I can help with closing costs”
versus “Let’s list it for this and expect $40,000 higher than our list price.” A lot of good news out there in
the market for home buyers. All right, guys. Thanks.

The post Interest Rates as of 12-21-22 appeared first on sellfor1percent.

Are you ready to take the plunge into home ownership in 2023? Buying a home is a major life decision and requires careful consideration of your current and future financial situation. This comprehensive guide will provide you with all the information you need to know before you commit to buying a home in 2023. From understanding the real estate market to understanding your credit score and budget, you’ll have all the information you need to make an informed decision. We’ll also provide tips on how to save money during the home-buying process, as well as ideas on how to find the perfect home for you and your family. With this guide in hand, you’ll be well prepared to purchase a home in 2023.

Assessing Your Financial Situation

Before you begin to search for a home and talk to realtors, you should first assess your financial situation. You’ll need to understand your current income and expenses, as well as your future financial goals, to determine if you have the ability to purchase a home. Some considerations to make before you start your home search are: What are your current monthly expenses? What are your long-term financial goals, such as saving for retirement or sending your children to college? Do you have any debt, such as student loans or credit card payments? How much do you currently earn annually? What is your credit score? Do you have any other liens, such as car loans or mortgages? All of these factors will play a role in your ability to qualify for a mortgage, the amount you’ll be approved to borrow and the interest rate you’ll be offered.

Researching Your Local Real Estate Market

The first step in your home search is to research your local real estate market. You’ll want to evaluate current home sales in your area to determine if the market is hot or cold. By understanding the supply and demand of your local real estate market, you’ll be able to make more informed decisions throughout the home-buying process. There are many online resources that offer real estate market reports, including: The National Association of Realtors realtor.org> : The National Association of Realtors is a great source for real estate market reports, including information on existing home sales, inventory of homes for sale and local real estate trends. Trulia trulia.com> : Trulia is a real estate search engine that provides a wide range of local real estate market reports, including information on home sales, home values, rental rates and neighborhood demographics. Zillow zillow.com> : Zillow is another real estate search engine that provides local real estate market reports, including information on home sales, home values and neighborhood demographics.

Understanding Mortgage Rates and Terms

When you’ve found a home you want to purchase, you’ll need to apply for a mortgage loan. You’ll work with a mortgage lender to apply for a loan that is used to purchase the home. There are many organizations that provide mortgage loans, including banks, credit unions, online lenders and mortgage brokers. Before you apply for a loan, you’ll want to understand the different types of mortgage rates and terms. Fixed-rate mortgage: A fixed-rate mortgage is a type of mortgage loan in which the interest rate and monthly payment amount remains constant for the life of the loan. Because the interest rate does not change, this type of loan is generally considered less risky for the lender. Adjustable-rate mortgage: An adjustable-rate mortgage (ARM) is a type of mortgage loan in which the interest rate and monthly payment amount can change at predetermined times during the life of the loan. An ARM may be an option if you have a lower credit score, since it may be more difficult to obtain a fixed-rate mortgage loan.

Looking at Home Prices and Appraisals

When you’ve found a home you want to purchase, you’ll want to obtain a home appraisal. An appraisal is an estimate of the value of a home that is used to determine the loan amount you qualify for and the home’s value if you ever sell it. You may also need an appraisal if you’re refinancing your home or you’re applying for a home equity line of credit. Before you purchase a home, you’ll want to ensure that its appraised value is close to its sales price. You don’t want to buy a home that is significantly overpriced, as this could lead to financial issues in the future. If the home you want to purchase appraises for significantly less than its sales price, you can negotiate the sales price with the seller or look for another home.

Working with a Real Estate Professional

While purchasing a home is a major life decision, it doesn’t have to be done alone. Many home buyers seek the help of a real estate agent when purchasing a home, as they can help streamline the process and provide valuable insight into the home-buying process. When you’re ready to purchase a home, you should consider hiring a real estate agent to assist you. A real estate agent can provide you with valuable insight into the home-buying process and help you navigate the real estate market. Additionally, you may be able to find a real estate agent that charges a fee-for-service, meaning you don’t have to pay them a percentage of the home purchase price, as is common in a traditional real estate commission.

Understanding Home Inspections and the Home Closing Process

Before you sign the final paperwork to purchase a home, you’ll want to obtain a home inspection. A home inspector will thoroughly examine the interior and exterior of the home, including the roof and foundation, to determine if any issues need to be addressed before you purchase the home. A home inspector will provide you with a report of any issues they find, and you can use this information to negotiate the sales price or ask the seller to fix any issues before you purchase the home. Additionally, you’ll want to familiarize yourself with the home closing process.

Knowing Your Rights as a Home Buyer

Prior to purchasing a home, you should be familiar with your rights as a home buyer. You have the right to receive a clean title to the home, meaning the seller has no liens or other interests in the property, as well as a clear title to any adjoining property. You also have the right to an accurate written appraisal, clear and accurate disclosure about the property and an inspection of the property before you purchase it. You have the right to have the seller repair any issues with the property and make the property safe before you purchase it. You also have the right to rescind the contract and get your down payment back if the seller doesn’t make the necessary repairs.

Finding the Right Home for You

Once you’ve gone through the home buying process and understand the steps that come with purchasing a home, you’ll want to find the right home for you and your family. There are a few ways you can go about finding the right home for you, including: Talk to your friends and family members who are currently homeowners and see if they know of any houses that are for sale. Search for homes for sale online. Visit open houses and talk to real estate agents about the homes you like. Sign up for text alerts from real estate companies so that you can be notified when homes that meet your criteria go on the market.

Preparing for the Unexpected

Even though you may have done your due diligence when purchasing a home, unforeseen events can happen. No home is perfect, and you may have to make repairs or complete renovations as soon as you move into your new home. You may also have to deal with uncooperative neighbors or other common homeowner issues. Here are some ways you can prepare for the unexpected: Before you purchase a home, make sure you have enough money saved to cover the cost of repairs. Consider purchasing homeowners insurance. Join a homeowners association. Get to know your neighbors.

Tips to Make the Home Buying Process Easier

The home buying process can be overwhelming, especially if you don’t know what to expect. There are a few ways you can make the home buying process easier, including making a budget and sticking to it when house hunting. Find a real estate agent you trust and ask them to walk you through the home buying process. Start researching home buying tips and trends now so that you’re prepared for the next real estate market cycle. Prepare for a long process. You should expect to be in the market for a few months, even if you’re ready to buy now.

Looking to buy or sell a home in 2023? Our Realtors® are some of the most experienced agents in Ohio. We know the local real estate market and are always working tirelessly for our customers to get the very best results. Give us a call today to see how Sell for 1 Percent can help you when buying or selling your home.

The post What You Need to Know Before Buying a Home in 2023: A Comprehensive Guide appeared first on sellfor1percent.