Published: June 02, 2022
Welcome to my first blog ever from Laurie Cannon. I hope to appeal to your Real Estate related interests with a timely paragraph or two each week. So check in for all things informative and helpful in the real estate biz. May of 2022 is starting off busier than expected even though interest rates have climbed to over 5%. There is such a back up of buyers apparently in all the price ranges that it is not stopping the selling of listings in our areas of MD and DE. Interest in well priced and well maintained homes is still high with many houses still going pending right after going on the market.
We are seeing a lot of the “domino” transactions, that is when the small house seller is buying the middle house and that seller is buying the large house and that seller is downsizing or moving out of the area. It makes for a very healthy market since one homes’ equity and owner is going into the next transaction. We still do see the people moving in and out of the area of course, and those people are healthy buyers and sellers too and help keep the market aggressive since those buyers are not contingent on something selling in order to purchase but any market is well fortified that has a variety of interest.
We may be seeing some creative lending tools to compensate for the higher interest rates; ie Buyers paying a point or two, but really nothing too crazy. Anything that is done, should be something that gives the buyers a savings, but doesn’t take away the from the equity of their home purchase. And truthfully, although the rates are higher than they were a couple of months ago, they are still extremely attractive. For instance, when I first moved to Salisbury In 1990,the interest rates were around 10% and it was common for the Buyers and the Sellers to each pay a point so as to get the interest rate down to 8! We thought that was a real bargain!
Now, I’d like to let one of my preferred lenders tell you what’s going on lending wise.
Hope Morgan with MNET Mortgage take it away…..
This week we are waiting to see what happens with the highly anticipated FOMC (Federal Open Market Committee) Meeting. The expectations are for the Fed to hike the Fed Funds Rate by .50%. This will have no impact on home loan rates. Much like 2018 when the Fed hiked rates a 4th time, mortgage rates improved dramatically as it was perceived the Fed was going to slow the economy too much with more rate hikes. Time will tell what the Fed will be able to do in this rate hiking cycle. There are heightened signs that the Fed won’t be able to hike as much which includes U.S. economic growth slowing quickly from last year’s pace. In the long and short of it all. Rates have been on the rise. Hopefully we will begin to see them become more stable. During these past months, borrowers have experienced at least a 2.5% increase.