Home News I’m the COO of a mortgage company that’s funded more than $100 billion in loans. Here are the 3 things you need to know about the housing market now

I’m the COO of a mortgage company that’s funded more than $100 billion in loans. Here are the 3 things you need to know about the housing market now

by admin
0 comment

Steve reich

Mortgage rates have risen above 6% last week, and some professionals say they could be even higher, according to Bankrate data. ((((You can see here the lowest mortgage rates you might qualify for.In addition, home prices have risen by more than 20% year-on-year, creating an affordable challenge for many aspiring homebuyers. And that would make them wonder: what should I know if I want to buy a home now?So — as part of our series Here, we ask prominent real estate professionals about their thoughts on the housing market. We talked to Steve Reich. He is the COO of the finance of America Mortgage mortgage company and has 20 years of experience in processing and underwriting mortgages, funding more than $ 105 billion in consumer loans since 2015. I am saying. This is his idea of ​​the current housing market.

Affordable challenges are now very real

“We saw house prices cool down a bit at the end of last year, but in the first half of 2022, house prices rose almost 20% year-on-year in February, accelerating again,” Reich said. Mr. says. Experts (like Daryl Fairweather, Redfin’s Chief Economist, this The series) points out that this type of growth is likely to be no longer sustainable, in which case house price increases could be expected to slow later this year. “Anyway, in the short term, rising home prices will have a big impact on the number of families who can afford to buy or can be priced from the market,” Reich says.

Another thing to keep in mind is that rising interest rates may add more complexity to the problem of affordability. “On the other hand, I think the fear of missing low interest rates has contributed to some of the price increases we see as future buyers rob their homes and enter into a bidding war. Higher rates hinder some buyers and ultimately make dampers on-demand, “Reich said. ((((You can see here the lowest mortgage rates you might qualify for.).

Homeowners may hesitate to sell their homes — it may worsen already tight home inventories

Home inventories are still at record lows. We are “in the best housing season, with more families tending to bring their homes to market and prepare to move in the summer after school,” Reich said. But he adds: “There is uncertainty about the amount of inventory available. Indeed, for some homeowners fixed at low interest rates of 2% or 3%, they sell their homes and buy new homes. You may hesitate.

In terms of new housing construction, it is unclear how long-term inflation will affect the availability of new units in the future, but the rest of supply chain problems, labor shortages and soaring fuel prices. Impacts can continue to infiltrate new things-according to Reich, housing construction costs, labor costs, and other areas of housing and real estate landscapes.

Competitive bidding may be required to compete in this tough market

Given these factors, buyers need to be aware that strong bids may be required to compete in the current market environment and accept offers. “You may need to be creative. If possible, consider limiting the contingencies of your offer and don’t demand too many credits. For example, more flexibility in your timeline. Show the seller what you can do. For example, if you need more time to move or find another home, we suggest that you sign a leaseback deal with the seller, “Reich says. With a pre-approval on hand, a higher down payment, and a prepayment, you can financially strengthen your offer and make it a more compelling buyer.

That said, the competitiveness of offers varies from market to market (and of course from home to home). Some markets are much more competitive and less competitive than others. In fact, Redfin’s Fairweather recently told MarketWatch Picks that there are early signs that the housing market is starting to cool, at least in the expensive coastal metro. “Buyers who have lost some bid wars in markets such as Los Angeles, San Francisco, Boston, and Seattle may find that they are less competitive with other buyers than they were a month or two ago. “Hmm,” says Fairweather.

You may also like