It’s Still A Great Time To Buy A Home. Here’s Why:
I have seen headlines recently about a housing market crash on the horizon and rising home prices spooking buyers away. As the #1 wholesale lender in the nation, United Wholesale Mortgage is committed to providing independent mortgage brokers with everything they need to give consumers homebuying advice based on the realities of today’s market – not just the latest headline.
It is a fact that home values have gone up 16.6% from May of 2020 to May of 2021, which is the highest annual increase since November 2005. But recently, Fannie Mae’s Home Purchase Sentiment Index (HPSI) found that 66% of respondents said it was a bad time to purchase a home, and I disagree.
Here is my take on two common questions facing the mortgage industry today.
1.????Home values have skyrocketed – should consumers wait to buy a home?
The mortgage industry may be experiencing unprecedented volatility and shifts, but rates are at all-time lows, and I firmly believe consumer buying power is the best it has been in a long time.
Take this scenario I mentioned in this month’s 3 Points video:
We don’t know how long rates will remain at historic lows, so a house valued at $333,000 with a 2.75% rate will be less expensive than a house valued at $325,000 with a 3.25% rate in the future.
2.????Is another housing market crash on the horizon?
It is understandable to be concerned when home values are rising fast, but what we saw in 2008 is not what is happening today. The housing market crash happened because of a cracked foundation in the industry. Since then, the CFPB and the government have come together to establish guardrails and put the industry in a safer, more structured place. Today’s situation is simply a matter of supply and demand.
My outlook? The market is cyclical, and I think we will see a cooling-off period followed by a plateau… not anything close to a crash.
What You Can Do
Last month I had the opportunity to take nearly 100 independent mortgage brokers to the New York Stock Exchange to celebrate National Mortgage Brokers Day. I heard so many incredible stories of brokers going above and beyond to help borrowers into their dream homes. From teaching a borrower how to improve her credit to helping a borrower save for their down payment, a common theme was brokers having their borrowers’ best interests in mind. They were a true partner during one of life’s biggest moments. This moment is not any different.
Headlines and hearsay should not spook potential homebuyers away. Now is the time to calm any fears of a housing crash. Now is the time to educate consumers of today’s record low rate environment. Now is the time to demonstrate the true broker difference.
Mat
Expertise in Bottom Line Growth ? Increase Sales ? Reduce Expenses ? Digital Solutions ? Automate Workflows ? Optimize Processes ? ?? Employee Loyalty ? Combat High Inflation
3 年Good point about low interest rates Mat Ishbia - despite the rising cost of houses, low interest rates can and probably will help avoid a housing market crash as some are predicting. Never underestimate what low interest rates can do.
Director of Enterprise Sales & Agency Partnerships at adMarketplace
3 年Matt- great information to share!
Wholesale Mortgage Broker | Real Estate Broker | Superior Partnerships | Higher Satisfaction | Client Savings
3 年It's always a great time to buy a house to live in. You have to live somewhere, and owning the roof over your head and dirt under your feet gives you the control of where you are going to sleep tonight. In our area, there is such a tremendous shortage of housing that all renters have this concern... Every night...
Mortgage Loan Officer at NEXA Mortgage, LLC NMLS#1947659 Licensed in Arizona, California, Texas
3 年ALL IN MAT!! Thank you for doing all you do to protect the broker channel and being a true example of leasership!! Your hard work does not go unnoticed and inspires myself and so many others! Thank you!
Bringing value to every man, woman and child on the face of the earth.
3 年I feel empowered by your second point, as fear is a big reason we miss opportunities. Your words are indisputable. ? Is another housing market crash on the horizon? It is understandable to be concerned when home values are rising fast, but what we saw in 2008 is not what is happening today. The housing market crash happened because of a cracked foundation in the industry. Since then, the CFPB and the government have come together to establish guardrails and put the industry in a safer, more structured place. Today’s situation is simply a matter of supply and demand.