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Talking Things Through With Multiple Lenders Makes Sense Again |
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![]() Over the past three or four years mortgage interest rates were sooooo low that there often wasn't too much of a difference in the interest rate quoted by one lender vs. another. Furthermore, buyers didn't have to think too creatively about different loan programs as far as fixed rate vs. adjustable rate, etc. The thirty year fixed mortgage rate was so exceptionally low that almost all buyers were purchasing with that program. But, now things have changed... Mortgage interest rates are quite a bit higher now... at or above 7% for a 30 year fixed mortgage rate! As such, savvy home buyers are... [1] Talking to more than one lender to see how interest rates and closing costs compare. [2] Considering fixed rate mortgages alongside adjustable rate mortgages that start out fixed for (usually) five or seven years. If you are buying a home in late 2022 or early 2023 it will matter now more now than ever that you talk to an experienced, professional, responsive, creative mortgage lender to make sure you are finding the financing program that is the best fit for your financial scenario and your plans for the coming years in your new home. | |
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October 2022 Contract Activity Has Dropped Significantly, Sort Of |
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![]() Has the local real estate market slowed down? Oh yes, quite a bit! How so? Last October 156 homes went under contract in the first 27 days of the month... and this year only 81 homes have gone under contract in that time frame. Wow. Quite a bit slower! Indeed. -- So, yes, contract activity this month is much lower than it was last year during October... but as the graph above reveals, there may be more to the story. First of all, the orange and green bars represent 2020 and 2021 and I think we'll eventually look back and conclude that they were abnormal years, with buying activity super-charge by a worldwide pandemic, as unexpected as that was. So, the bright orange and bright green bars that tower above the rest of the months on the chart might be outliers. Looking for a moment, then, just at the blue bars... This August (2022) we saw a 13% increase in August contracts compared to August 2019. This September (2022) we saw a 10% increase in September contracts compared to September 2019. And...in October... we are dragging ever so slightly behind October 2019, but things aren't looking overly different from where things were three years ago, just before Covid. -- So... is this October slower than last October when it comes to contracts being signed? Yes, absolutely! Much slower! Is this October slower than the last pre-Covid October we have seen in this market? It's slower, but just barely. Is the pace of home buying slowing down in Harrisonburg and Rockingham County? Yes, it seems so... but by how much depends on whether we compare the present times to Covid times or pre-Covid times. | |
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67 Single Family Homes, 16 Duplexes Proposed For Town of Dayton |
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![]() The 10.5 acre tract shown above, located on the southwest corner of the town of Dayton may soon be home to a new residential development featuring 67 single family homes and 16 duplexes in eight duplex buildings. The property is currently zoned R-1 for single family home development, but a rezoning request has been submitted to rezone 3.2 acres to R-2 to allow for the duplexes described above. This rezoning is being proposed by Hope Community Builders who is under contract to purchase the land from its current owners. The rezoning request will be considered on Monday, November 14th at 6:00 PM at the Dayton Town Council and Planning Commission's joint public hearing. | |
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Good Reasons To Allow And Disallow Showings Before Your House Is Listed For Sale |
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![]() In almost all cases, I do not recommend having showings of your home before it is listed for sale. But, as with most things in life, there are some exceptions. Here are some of the reasons NOT to allow showings before your house is listed for sale... [1] Buyers who view your home before you list it for sale are not likely to feel much urgency to make a decision about an offer. They don't have any competition, after all, so they can just think about it. Once your house is on the market and lots of buyers know it is for sale, each and every buyer who views your home will feel the urgency of making a decision about whether to make an offer. That felt buyer urgency works in your favor when selling your home - and you miss out on it for any individual buyers who view your home before it is on the market. [2] If you receive an offer from a buyer who views your home before it is listed for sale you will be considering that offer without the market context of how much interest your house would have if listed for sale and how many offers you might have if it were listed for sale. You might list your home and have 2 showings and 1 offer, or you might have 20 showings and 10 offers... but you won't know when you are considering the singular offer from the buyer who viewed your home before it hit the market. [3] Since you only have one offer, you are at least somewhat likely to sell your house for less favorable terms than if you had listed it for sale. Certainly, you might list it for sale and only have one offer - but if there were multiple offers when you listed it for sale, you could then select from multiple offers with different prices (possibly escalated), different contingencies and from buyers with different financial capabilities. Letting a buyer see your house before it is listed for sale opens the door to having only one offer to consider, which might not result in the best possible terms for you. Here are some of the reasons you might ALLOW showings before your house is listed for sale... [1] It's a lot of work to get your house ready for photos and showings, and even more so if you have kids or pets. ;-) Some sellers would gladly show their house once, before it hits the market, and have it under contract shortly thereafter, rather than going through the process of completely preparing the house for photos and showings. Certainly, you'll still want your house to look good for that one buyers... but preparing for their showing likely won't be as intensive as preparing for fully putting your house on the market. [2] Some sellers have a friend, neighbor or co-worker that has already expressed interest in buying their house and they (the seller) would be delighted to sell the house to that person or persons. If you want to give some known potential buyer a leg up in the buying process, letting them see your house before it is listed for sale, and potentially make an offer without having to compete with other buyers, then you can certainly choose to do so. It does create the downsides described above, but you might still elect to go this route because of those relationships. [3] I tried to come up with a third reason. I didn't. Feel free to send me your suggestions. ;-) As you can see, there are plenty of reasons to allow or disallow showings of your house before it is listed for sale. Generally speaking, I don't recommend it - but there can certainly be situations where it makes sense to pursue that path. | |
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Engaging With A Lender Continues To Be Essential For Buyers And It Does Not Have To Be Scary |
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![]() The local real estate market might be slowing down, a touch. For the past year the median "days on market" has been five days... which means that half (or more) homes that sold were under contract within five days of hitting the market. That is fast! Perhaps we'll eventually get to a time where homes are taking a full week or two (gasp!) to go under contract. In this very recent speedy market it was absolutely imperative that you had talked to a lender before you went to see a house for sale. You would likely need to make an offer within 24 hours of seeing a home, so having a lender letter in hand was a must. But even if or as the market is slowing a bit it is and will continue to be very important to have a lender letter in hand when going to see a house... though for slightly different reasons this time. Before... you needed a lender letter in hand to accompany the offer that you might make hours after viewing a house. Now... you need a lender letter to accompany an offer as well as to make sure you know what your mortgage payment will be within the context of recent rapid increases in mortgage interest rates. So, if you're in the market to buy a home now, but it's been a while (six months, a year, etc.) since you have talked to a lender... you should do so now. Talking to a lender doesn't have to be scary. They'll need some basic financial information from you in order to help you understand the type of mortgage you will qualify for and thus the price range in which you should be searching for homes. If you need a recommendation or recommendations for a great local lender, let me know! Call/text me at 540-578-0102 or email me here. | |
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Home Buyers Who Want To Buy A Home In The Next Year Likely Should Not Wait For Mortgage Interest Rates To Come Back Down |
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![]() If you are looking to buy a home right now you might be surprised by higher mortgage interest rates than we have seen for much of the past year... January = 3.45% February = 3.92% March = 4.16% April = 5.00% May = 5.30% June = 5.78% July = 5.51% August = 5.13% September = 6.02% Now = 6.94% How could mortgage interest rates be close to 7% after having started the year at 3.45%? Surely mortgage interest rates will start coming back down again soon, to 4% or 5%, right? Or even 6%? I don't think that we can assume that mortgage interest rates are going to drop substantially at this point. Mortgage interest rates may very well continue to be between 6% and 7% for the next 12 months. As such, if you are thinking about buying a home right now, you should see what your payments will look like at current mortgage interest rates and decide if that is a monthly payment that will work for you. If so, it may be worth going ahead and moving forward with a purchase rather than holding off in hopes of lower mortgage interest rates. While it is certainly possible that mortgage interest rates will start declining again, I don't think we can assume that is what will happen next. | |
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If You Are Hoping To Sell Your Home In 2022, List It Very Soon, Or Adjust The List Price Very Soon! |
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![]() Summer just ended, right? It's just barely fall, right? There's plenty of time remaining in 2022, right? Well, sort of. Most real estate transactions take around 45 days to get from contract to closing. Certainly, some of them are happening in 30 days, but it's good to plan on a 45 day window between contract and closing. Thus, if you do not yet have your house on the market for sale, here's a potential timeframe that you might experience if you wanted to sell in 2022...
Don't forget, after all, that the Thanksgiving and Christmas holidays can often slow things down with lenders, title companies, etc., during November and December. If you have your house on the market for sale now, and it is not under contract, this is also an ideal time to consider making a price change to try to secure a contract with a buyer within the next week or two if you are aiming to have the closing take place before the end of the year. It can seem like there is plenty of 2022 left to go (there is) but when it comes to the timing of a real estate transaction, if you want to close on the sale of your home in 2022, you should likely be getting started soon! | |
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Contract Activity Seems To Be Slowing Down (Quite A Bit) In October 2022 |
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![]() It's best not to get your face too close to the data. The closer we look at the data, at a smaller and smaller data set, the more likely we can find ourselves concluding one thing when another is actually true. So, as you ponder the meaning of the graph above, keep in mind that the last set of data (October 1 - 15) is a rather small set of data... from just two weeks in our local market... so it may or may not be indicative of an overall trend. But... with that length disclaimer having been thrown out there... After seeing modest declines in contract activity in August (-13%) and September (-15%) it seems that contract activity might be REALLY slowing down (-51%) in October. Last October, in the first half of the month, a total of 81 contracts were signed for buyers to buy and sellers to sell houses in Harrisonburg and Rockingham County. This year in those same 15 days, only 40 contracts have been signed. It's hard to say if this significant decline in contract activity will continue as we move through October and into November, but if things were slowing down slightly in August and September, they seem to be slowing down more quickly in October. | |
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Income From A Short Term Rental In Your Home Can Make Housing More Affordable |
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![]() Home prices are higher than they have been anytime in the past decade. Mortgage interest rates are higher than they have been anytime in the past decade. And, thus, for many buyers, housing costs (mortgage payments) are higher than they have been anytime in the past decade. What is a home buyer in 2022 to do given these high housing costs? One strategy being pursued by some home buyers is to look for a property where they have the possibility of generating additional income with some portion of their home. In most cases, these days, that is considering renting out some part of a home on a short term basis via AirBNB or otherwise. Sometimes it might be a basement efficiency apartment, sometimes a space over a garage, or any number of other configurations depending on the property. There certainly aren't enough properties for sale (in any given timeframe) that offer this extra income possibility to match the number of buyers who would have interest in the configuration - but when these properties do become available, they can offer a buyer the opportunity to offset their total housing costs. | |
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Price Reductions Will Likely Make Lots Of Sense To Some Home Sellers |
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![]() Fictional Seller Sally bought her home about eight years ago for $190K. Three years ago, Sally realized her home was worth $240K and was pretty happy about that. Last year, Sally was astonished to conclude that her home was likely worth $290K. Wow! Sally just landed a new job out of state and is getting ready to sell and the most recent comparable sales indicate that her home is likely worth $310K in the current market. Sally is elated! Sally lists her home for $309,500 and has had quite a few showings during the first three weeks on the market, but has not received any offers. Would it surprise you that Sally decides to go ahead and reduce her list price to $299K? Would it surprise you if three weeks later Sally reduces the price again to $289K? It wouldn't surprise me. While some sellers might think about $299K and $289K relative to the possible current value of $310K, Sally is thinking about $299K and $289K relative to... [1] Her original purchase price of $190K. [2] Her conclusion a year ago that her home was likely worth $290K. Certainly, Sally would be delighted if she could sell her home for $310K, but she will also be very happy to sell it for $299K or $289K. Moving forward through the balance of 2022 and in 2023 I suspect there will be some sellers who will happily sell for a bit less than the market might indicate their house is worth, as that "lower" price is still much, much higher than they could have imagined their home was worth for most of the time that they have owned it. This likely won't be all sellers, and perhaps not even most sellers, so it might not cause an overall shift in home values... but some sellers will likely be quite willing to reduce their price if their home does not sell in a timely fashion. | |
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If You Will Be Buying A Home In The Next Year, Sooner Might Be Better Than Later |
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![]() Home prices have increased quite a bit over the past few years. Clearly, that's a bit of an understatement. ;-) Mortgage interest rates have increased drastically (doubled+) over the past year. As such, some would be home buyers might be wondering whether they should go ahead and buy a home now, or wait until next year. Waiting would make sense... if you thought home prices were going to decline and/or if you thought mortgage interest rates were going to decline. I think there is a relatively low possibility that we will see a significant decrease in home prices and/or mortgage interest rates over the next six to twelve months. Buying sooner rather than later would make sense... if you think home prices will either stay at about the same level or they might increase... and if you think mortgage interest rates will either stay at about the same level or they might increase. I think there is a relatively high possibility that home prices and mortgage interest rates will either stay at the same level or increase over the next six to twelve months. So, if you are almost certainly going to buy a home in the next 12 months, then the chances are sooner will probably be better than later. Clearly, this guidance is based on my best guesses (or your best guesses) about future trends in home prices and mortgage interest rates... so we're all just guessing. Only waiting and watching will show us what really will happen. Let me know if you want to chat further about this topic as it relates to your particular portion of the local housing market. | |
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Harrisonburg Area Home Sales Slowing Slightly But Prices Keep Rising |
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![]() Happy Thursday afternoon, friends! Fall is upon us... with cool mornings and evenings, but often still reaching pleasant afternoon temperatures... and beautiful colors on trees throughout the Valley! Fall is my favorite season for the reasons above, and because it's volleyball season. My daughter plays JV volleyball and I coach middle school volleyball, both of which bring a lot of fun, excitement and joy to my life each fall. I hope that your fall, likewise, is full of fun, excitement and joy! Before we get to real estate... Each month I offer a giveaway, of sorts, for readers of this market report, highlighting some of my favorite places (or things) in Harrisonburg. Recent highlights have included Black Sheep Coffee and the Harrisonburg Half Marathon and the JMU Forbes Center. I'm bouncing back to another of my favorite spots to grab a cup of coffee... Bella Gelato, located on West Water Street in downtown Harrisonburg where you can enjoy delicious gelato that is made by hand on site, plus a pastry case of baked goods, and an espresso and coffee bar where you'll often find me ordering a caramel latte. Interested in checking out Bella Gelato? Click here to enter to win a $50 gift card to Bella Gelato! ...and this month's featured home is... The beautifully renovated home on the cover of this month's market report is located on the corner of Franklin Street and Myers Avenue, just a short walk from the many restaurants and shopping destinations in downtown Harrisonburg... such as Bella Gelato. ;-) Check out 400 Franklin Street here. ...and now, the real estate market update... First, before we get to the numbers, let's start with the big picture...it feels like the local housing market is changing or transitioning in some ways. Mortgage interest rates have increased drastically over the past six months and that seems to be impacting the amount of buyer activity and enthusiasm in our local market. Most sellers are experiencing fewer showings and fewer offers in the first week or two of their homes being on the market. But yet, we are still seeing relative stability in the number of homes selling in this area, combined with continued increases in the prices for which homes are selling. ![]() As shown above... [1] Home sales were 7% slower this September than last, with 140 home sales this year compared to 150 home sales last year. [2] Thus far this year we have seen 1,234 home sales in Harrisonburg and Rockingham County, which is 1% more than we saw in the first nine months of last year. [3] The median sales price has increased 11% over the past year in Harrisonburg and Rockingham County, from $269K to $300K. [4] Homes are still selling very quickly, with a median days on market of only five days. More on this later. So if things feel slow lately, how are things still stable? Good question... see below for a month by month breakdown... ![]() As shown above, we saw much higher numbers of home sales this year during April, May and June, followed by lower numbers of home sales this year during July, August and September. So, we had a very strong second quarter of the year, followed by somewhat weaker third quarter. What, then, will the fourth quarter of the year show? Given that mortgage interest rates keep creeping up higher and higher, I am anticipating that the fourth quarter of this year will show fewer home sales than the fourth quarter of 2021... which would then lead to an overall decline in the number of home sales between 2021 and 2022... if my guess is correct... and I make plenty of guesses that are not correct. ;-) The following graph helps put this year in an even more helpful context... ![]() Two few observations about this "stacked up" graph above... [1] Yes, 2022 is still slightly ahead of 2021 through September... but we the gap is much narrower than it was a few months ago. [2] Even if we don't see 1,673 home sales in 2022 to match last year's total count, it seems very likely that we will still eclipse both 2019 and 2022. The following two trends seem to be running counter to each other, at least thus far... ![]() The orange line above shows the number of homes selling on an annual basis in Harrisonburg and Rockingham County. The number of annual sales was climbing quickly through the end of 2021 but has mostly leveled off since the start of 2022. It seems unlikely that the annual pace of home sales will start increasing again anytime soon. The green line above shows the median sales price of homes selling in a 12-month period. As you can see, sales prices keep on rising. The median sales price over the past 12 months has been $292K... which is about $26K higher than the median sales price of $266K just a year ago. Moving forward, I expect we'll see home sales (green line) stay level or decline somewhat... while sales prices (orange line) will likely keep rising or possibly level out a bit. Changes in home prices over time are pretty wild if we scoot back a bit and look at a multi-year picture... ![]() If only everyone had bought a median priced home ($198K) five years ago... then everyone would own a home that is now potentially worth $100,000 more, given the current median sales price of $299,837 in Harrisonburg and Rockingham County. This is a drastic shift in sales prices over a relatively short timeframe, meaning that... [1] Housing is more expensive for anyone who does not currently own a home. [2] Anyone who has owned a home during this time likely saw a significant increase in their home value and net worth. I am simultaneously thrilled for all of my past clients who have bought homes and are feeling good about these trends... and depressed for all of my clients who have not been able to purchase a home and are now faced with much higher purchase prices (and interest rates) in today's market. But back to that leveling off thing... ![]() This graph shows that home sales (blue line) are starting to level off and inventory levels (green line) are starting to stabilize and increase a bit. If there continue to be slightly fewer buyers in the market, and slightly more sellers in the market, then... [1] Home buyers might have a slightly easier time securing a contract on a home they hope to purchase. [2] We might see a slightly smaller increase in the price of homes over time. Read that twice, please. I'm not currently anticipating a decline in prices, but rather, a slightly smaller increase in prices. I don't hit on this every month, but it can be helpful to realize that we have seen a pretty good sized increase in the number of new homes being built and sold in this area... ![]() This graph is showing the number of new detached home sales per year in Harrisonburg and Rockingham County. This does not include attached home sales... which would would be duplexes or condos. After averaging 83 new home sales per year between 2018 and 2020, we saw a significant increase in 2021 to 144 new homes... and thus far in 2022, that is a total of 163 new home sales. Many, but not all, of these new detached home sales have been in Ryan Homes communities. It will be interesting to see how new home sales and resale homes track over the next few years especially within the context of higher mortgage interest rates. Now, a peek into the near future... ![]() In each of the past five months (purple arrows) we have seen fewer contracts signed than were signed in the same month last year. This probably doesn't surprise anyone who has been paying attention to changes in mortgage interest rates. Ever higher interest rates have changed the potential mortgage payment for buyers, which is definitely impacting how many potential buyers are capable of buying or interested in buying. Multiple (five) months of lower levels of contract activity means that we will continue to see lower levels of closed sales over the next few months... which is why I expect we'll see a slower fourth quarter of home sales this year as compared to last year. And after years of saying inventory levels are down, now we see that... ![]() Inventory levels are actually rising a bit. When looking at two years ago compared to one year ago we see about a 20% decline in inventory levels. When looking at one year ago compared to today we see about a 20% increase in inventory levels. Today's inventory levels are still *very* low compared to historical norms, but buyers today seem happy to have slightly more choices of homes for sale, or to see homes sticking around on the market for slightly longer before going under contract. Though... about that time on market trend... ![]() Over the past 12 months, the median number of days it took for homes to go under contract once listed for sale was... five days! We first hit that low (low!) level of a median of five days back in July 2021, and we have been hanging out at that same level ever since. Interestingly, I suspected that if I looked at a shorter, more recent, timeframe that I would find that it is taking homes longer to go under contract. With that theory in mind, I looked at the median days on market over the last 30 days and it was... still five days. So, the market (overall) seems to still be moving very quickly with half of new listings that go under contract doing so in five or fewer days. And finally, a visual to show you how quickly mortgage interests have been rising... ![]() A year ago, mortgage interest rates were right around 3%. Six months ago, mortgage interest rates were right around 4.7%. Now, today, they are all the way up to 6.7%. As you might imagine, this increase in mortgage interest rates significantly affects a buyer's mortgage payment - and potentially their ability to purchase the home they might hope to purchase. So where does all of this leave us? Despite what may be going on in other real estate markets around the state or the country, here's what seems to be true in our local market at this moment in time... [1] Contract activity and home sales has slowed in the second half of 2022, though the highly active first half of 2022 is still keeping us on track with 2021 thus far. [2] Higher mortgage interest rates are affecting buyer behavior which is often resulting in fewer showings and fewer offers. [3] Despite the points mentioned above, homes are still going under contract very quickly and home prices keep on rising. As you look ahead to the remainder of fall, and into the winter months, if you're thinking about buying a home, or selling a home, we should chat about how things are going in your segment of our local market as it relates to the property type, price, size, location and age of your home. I'll check in on the market again in about a month, but until then, enjoy your fall days, and best of luck to anyone else running in the Harrisonburg Half Marathon this Saturday! | |
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Buy A Home For You, Not Just The Next Owner |
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![]() As we walk through houses thinking and talking about if each house works well (or not) for you and your family... it can be tempting to start putting each house in a far future context... "Yes, this layout and these room sizes would be great for us... but will the next buyer like them?" "I love the backyard and gardens... but maybe the next buyer will think they are too small?" "I love this house and I don't mind at all that the bathrooms are a bit small in... but maybe that will be a sticking point for the next buyer?" Sometimes I see a home buyer fall IN LOVE with a home, but then talk themselves out of it because they aren't confident about whether they will find a future buyer that loves the house just as much to whom they can sell the house in the future. Yes, it is important to think a bit about future resale when you are buying a home... but it is even more important that you love the home that you are about to buy. Don't buy a home that you don't like, that will be easy to sell later. Don't decide not to buy a home that you like only because it won't necessarily be easy to sell later. Buy a home for you... not just the next owner! | |
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University Boulevard To Be Realigned In Forest Hills Area |
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The (winding) section of University Boulevard between the Convocation Center parking lot and the intersection of Forest Hills Road and Oak Hill Drive will be realigned and widened to include both a roadway, shared-use path and sidewalk... but, likely not until 2025. Who will pay for this transportation transformation? The project is estimated to cost about $10.4 million and these costs will be paid as follows...
View a larger version of the map above here. Learn all about this realignment project on the City website here, or via this recent Daily News Record article. | |
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Updates On Proposed Residential Developments In Rockingham County |
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![]() BOYERS CROSSING September 2022 - Approved by Rockingham County Board of Supervisors ZEPHYR HILL September 2022 - Approved by Rockingham County Board of Supervisors THE GLEN AT COOKS CREEK August 2022 - Approved by Bridgewater Town Council AND MORE Find out about the many new developments and proposed developments here at HarrisonburgNewHomes.com. | |
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How Will Our (Local) Climate Change Over The Next 20 (plus) Years? |
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Give it 20 years, and Harrisonburg and Rockingham County might be the "coolest" place to be living in these parts. The map above is showing projected temperatures about 20 years from now, but you can look even further into the future on Climate Impact Lab's interactive map here. | |
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Help Shape The Future Of Rockingham County! |
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![]() Rockingham County is revising and updating its Comprehensive Plan, which is a document that sets the vision and goals for the next 10 to 20 years! The last review was approved by the Board of Supervisors on September 23, 2015. The Comprehensive Plan addresses topics such as:
The policies defined in the plan will guide the County's future direction and priorities for growth, services, and land use regulation. And... YOU... can have a voice in the updated Comprehensive Plan! Take a few minutes to complete the Public Input Survey by clicking here. Find out more about the Comprehensive Plan update here. | |
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Should You List Your Home Now Or Wait Until Spring? |
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![]() Now or Later? Now! :-) I mean... don't get all panicky about it... but I would definitely recommend listing your home now, rather than waiting until the spring. Oftentimes homeowners who might sell in fall or might sell in the spring decide that they might as well wait until spring. I think this year is or should be different for homeowners who aren't sure whether to sell now or wait until spring. Yes, interest rates are high right now, but inventory levels are still low, homes are selling quickly, and at great prices. [1] Interest rates might have come down some, but they may also be just as high or higher. [2] Inventory levels could quite possibly be higher (more competition) if the market slows over the next six months. [3] Homes may not be selling as quickly. [4] Home prices might be even higher in six months, but they could also have flattened out or declined a touch. I am not predicting a major change in the state of our local housing market... and I am not saying that the sky is falling... and I don't think the local housing market is going to be much worse six months from now... ...but, I think the calculus on whether to sell in the fall or to wait until spring is a bit different this year, and some homeowners that might have normally waited until spring should probably consider listing their homes this fall instead. Just a thought. What are your thoughts? | |
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Where Might Mortgage Interest Rates Go From Here? |
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![]() 30 year fixed mortgage interest rates were around 3% a year ago... and now they are up to 6.7%. Ahhhh! Some home buyers today, taking out mortgages at today's rates, are wondering whether it is likely that they will be able to refinance their mortgage anytime soon to get a mortgage rate lower than 6.7%. It's very difficult to know whether that would be likely... but a lot of that would have to do with what historical norm we may or may not gravitate back towards within the next few years. Are mortgage interest rates going to settle back down to 3%? That seems extraordinarily unlikely. Might they drop back down to the average rate over the past 10 years, of 3.8%? That seems somewhat possible, but still not necessarily likely. Might mortgage interest rates drop down to the average rate over the past 20 years, which was 4.7%? That seems quite possible, which would result in a 2% drop from today's 6.7% to the average over the past 20 years of 4.7%. Or, if you want to be even more conservative, we could look at the average mortgage rate over the past 30 years... which was 5.7%, still a full percentage point below the current rates. Another way to look at this is to note that mortgage interest rates were above the current 6.7% rate between 1992 and 2001... and below the current 6.7% rate between 2001 and 2021. Are we headed back towards mortgage interest rates we saw in the 90's? Or the early 2000's? As you might have gathered, I have no actual answers here other than to point to this historical data as a greater context for current mortgage interest rates. :-) | |
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Well, I Suppose This Was One Way To Revive The Market For Future Mortgage Refinances? |
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![]() Sorry. Bad joke. Probably too soon. Mortgage interest rates have risen even further this week... with the current average rate on a 30 year mortgage now at 6.7%. One year ago it was 3.01%. Also one year ago, some said that every last person who could ever possibly think about refinancing their mortgage certainly must have done so. But now it seems some buyers are likely entering into fixed rate mortgages at rates that are high enough that they will be planning to refinance sometime in the next few years with the assumption that at some point we won't be looking at 6.7% interest rates any longer. I suppose it is also important to note that a 5/1 ARM is currently at 5.3%, which might be a MUCH better option for some home buyers. This mortgage interest rate would stay level at 5.3% for five years, and then have the potential to adjust once a year each year thereafter. It's a topsy-turvy time in the mortgage world right now, which can impact the home buying world, which can impact the home selling world. The steady increase in mortgage interest rates has certainly affected housing affordability, especially when piled on top of higher home prices. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
Licensed in the
Commonwealth of Virginia
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