Recent actions by the Federal Reserve will address inflation hitting the housing market in a big away. Mortgage rates jumped to levels not seen since 2008. That affects anyone considering buying a new home.
Rates moved from 2.7% to more than 6% now. That puts home buyers under more pressure with higher payments. But local real-estate companies and financial institutions think the move will bring down overall costs in the long run.
Local 4 News spoke with Mel Foster Co. Inc. and GreenState Credit Union representatives. They still encourage those who can afford it to buy homes, even at this interests rate.
GreenState’s Chief Mortgage Officer Ryan Doehrmann said he’s been with GreenState since 2009 and has been in the mortgage business for 20 years.
“Tough times don’t last. Tough people do,” said Doehrmann, who enjoys his career.
“It’s been crazy, but it’s been fun. It’s one of those industries that is extremely rewarding, because you’re truly making a difference for individuals and families,” he said.
Interest rates are at the highest they’ve been in nearly 15 years. But according to https://www.rocketmortgage.com/, just 30 years ago rates were in the double digits and much higher than what we’ve seen these last few years.
“In the 1980s it was double digits. But to our generation, 6% is astronomical,” Doehrmann said.
Doehrmann and local real-estate companies such as Mel Foster are saying that now is still a really good time to buy a home.
“First of all it’s got to depend on their payment,” he said. “You need to be able to afford your payment. So rates are higher, but if you’re able to afford it, still buy, because there’s going to be refinance opportunities that come from this.”
“The interests rate to be right at a 30-year fixed to be right at 6%. While it’s different than what we’re used to seeing – this last stretch – it still is a very good rate,” said Mel Foster’s Brokerage President Lynsey Engels.
Doehrmann said patience is important.
“We need to be patient – ride this out – let the feds do their thing to bring inflation down. And I think we’ll see a better and more healthy housing market when we’re past this initial tough period,” he said.
“For buyers, they’re wanting to lock in these rates now because they hear through the media that the interest rates are rising. So they want to lock in now,” Engels said.
So far, the market has been steady, and real estate businesses hope for them to remain that way.
“I do think things are really strong here. In July the average days on the market across the region was 16 days,” Engels said. “Now through the month of August and into September, we’re at 19 days on the market. Our lot sales are still going really strong, so that tells me that there are still people out there for not only existing construction but the new construction as well.”