We’ve heard all the hubbub about higher mortgage rates having a negative effect on the real estate market. But the non-taper has caused rates to come back a bit – we are now down around 4.375% for 30-year conforming rates.
For those who had their heart set on having payments lower than what you get with a 4.375%, 30-year mortgage rate, then there are options available:
- Buyers can pay more points to lower their rate.
- Buyers can have the sellers buy down their rate.
- They can take an interest-only loan, instead of fixed-rate.
- Buy a cheaper house.
Or, in this cash-happy environment, they can borrow less:
The stir-up from higher rates might cause some changes in the buyer psychology, but the baseline problem hasn’t changed – there aren’t any great buys available, and even the decent buys are loaded with compromise.
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We’ve wrapped up eight years of www.bubbleinfo.com! Thanks for participating, and most of all, thank you to those have become clients.
I do this to demonstrate my abilities, and want to help more people buy and sell homes. If you, or someone you know, is thinking of moving, I’d love to hear from you!
Buyers can pay more points to lower their rate.
Buyers can have the sellers buy down their rate.
They can take an interest-only loan, instead of fixed-rate.
Buy a cheaper house.
Or… negotiate a lower price.
“Ain’t nothing price won’t fix” as my new t-shirt says. Thanks. I will share some pics in a suitable location shortly.
Congratulations on another milestone.
Wouldn’t it be great to negotiate a lower price? When I’m the listing agent and hear that the buyer wants to pay less to get a lower payment, this is the example I’d give his agent:
If all a buyer wanted was a lower payment, a lower price would have minimal impact.
$900,000 loan at 4.0% (WFB jumbo rate today with 1 point) = $4,297/mo.
If the seller helped to lower the loan amount by $50,000…..
$850,000 loan at 4.0% = $4,058/mo, or just $239 per month savings.
But if the seller added a couple of points to buy down the rate to 3.625% on a $900,000, it lowers the payment to $4,104/mo and only costs the seller $18,000, instead of $50,000.
Or how about a $900,000 5-year ARM at 2.5%? Monthly payments are $3,556!
Sincere congratulations, Jim, on the 8th anniversary of bubbleinfo! Best real estate blog out there, in my opinion. Keep up the good work! I’ve learned so much…
Thanks Susie, have you ever thought about being a realtor yourself?
congrats on 8th anni, I am a big fan of your site too. some great insights plain and simple. keep on trucking
Congratulations, Jim! You are an amazing Realtor and have an excellent blog. Keep it up (please 🙂 )!
Good Lord,
I’ve been a reader of a n SD real estate blog for 6.5 years? (Time flies when you are having fun)
More power to you Jim. Keep it up, I enjoy the economic Tit Bits.