Rejoice in the waiting.
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Mortgage Rates
The mortgage rates have been falling steadily since April of this year. Falling of the interest rates could be making home prices increase. The lower the interest rate the more purchasing power the buyer has. Right now purchase rates are lower than refinance rates! As long as the economy keeps declining we will see interest rates drop.
For about the last year, there has been bidding wars ongoing with homes. A bidding war is when you have more than one offer on a home. The seller will either come back with a counteroffer to your offer or completely decline your offer.
*This causes home prices to skyrocket above what the house is really worth.
I’ve been given examples of people who have put their homes on the market in the last year for more than what the realtor told them they should, and the seller received offers for more than what they put the house on the market for.
How crazy does this seem? This is one reason why the Great Recession has happened.
The median price of a home sold in May rose 3.6% from a year earlier, according to Redfin. Last year around this time interest rates were around 5% for a 30-year fixed mortgage, as of today when I write this article the 30-year fixed is 3.82% according to the Mortgage News daily report. That is a huge drop. However, the supply of low-price homes for sale is still low.
During the housing crisis, the entry-level homes were eaten into significantly by investors. Millions of homes that went to foreclosure are now part of a class of institutional investor-owned rental portfolios.
This means that investors still own a huge part of entry-level homes and you have to rent them instead of buying them. Lower interest rates therefore are even more competition for entry-level buyers.
Resources
If you bought a house last year you might want to consider refinancing to a lower rate. Fannie Mae’s refinance calculator is a great way to find out if you could save money in refinancing. If you are purchasing check out Fannie Mae’s purchase calculator. I say that everything is always for sale for the right price 💰.
Currently Reading:
I just finished reading Daring to Hope. Great book on how God works in life all around us and how he brings people together.
And I ended up watching The Guernsey Potato Peel Pie Society on Netflix instead of finishing the book. I had a hard time following the book, however, the movie I thought was excellent! The movie/book is about how society was formed during the war and how a deep connection between two people came about through letters to one another.
I just started reading Book Girl.
Stay tuned for my upcoming book called Big Banks Small Thinking! My book is now available! Check it out here 🙂
If you love to journal, I created a 100-page Grateful Diary. You can purchase the diary here.
