Wonky world is probably more like it, right?! I have received SO many messages and texts asking my opinion of what the heck is going on in the market. I promise, this is NOT a boring blog and I will keep this short and concise so YOU have all the facts.
Prefer video? Here is a GREAT five minute listen by Tom Ross at the Bay Equity Team... stellar video without the BS! http://bit.ly/2Qec1mz. Tom nails it!
Here it is in a two minute read... interest rates were SO LOW (the lowest they have EVER been) that homeowners swarmed the banks to refinance the first week of March 2020, 600% of normal activity (insane numbers). The banking industry said 'we can't take any more, turn off the floodgates' so they bumped up interest rates not to just slow it down but to SHUT IT DOWN.
Buyer's that are already under contract but did not lock in their rates are now finding out that they do not qualify for the purchase. A change in rates from the low 3's to the high 4's can be hundreds of dollars a month. I hope your Realtor didn't remove the wrong contingencies. :-\
Buyer's that are not yet under contract but have been pre-qualified should be reaching out to their lenders to see how the current rates have affected their buying power. You may be looking at 400K homes this weekend and find out that you are only qualified for 380K now. Interest rates will come back down but it will take 4-6 weeks for this to happen to start to see that movement and to what number we do not know.
I have said this over and over again... those that are PREPARED and ready will get the best of everything. The best rates, the best homes, the best opportunities. Those homeowners that flooded the market the first week of March will WIN big time over the next 30 years because they were READY.
The biggest question I get is... do I think the values will go down? It is in my opinion that we will not see values go down. I do think we will see the quantity of Buyer's decline which is another way to 'shut off these floodgates' of Buyer's having to come out of pocket and remove their contingencies to get into a home. The Buyer's that aren't shopping at their max price point and stay in the game right now will be the ones that benefit the most.
There is no harm is getting yourself prepared but the longer you wait to see where you fit in this very dynamic time of homeownership, the further away homeownership will be for you.
Photo credits to #mrpuppers, always by my side. Change a life, rescue a dog.