Navigating the Silver Lining in Real Estate Amid Financial Uncertainty
Silicon Valley and Signature Bank’s recent collapse has sent shockwaves through the financial sector, resulting in widespread economic repercussions. Yet, despite the challenges, there’s a silver lining for the real estate market: lower mortgage rates. In this blog post, we’ll briefly overview the current situation, explain what it means for homebuyers, sellers, and owners, and suggest how you can capitalize on these opportunities.
Mortgage Rates in the Current Climate
Traditionally, mortgage rates have tracked the 10-year U.S. Treasury yield. However, amid concerns about instability in the banking sector, investors are increasingly seeking the security of government-backed bonds. This drives up bond prices, reduces yields, and consequently lowers mortgage rates.
However, the landscape is rapidly changing. The U.S. Federal Reserve recently announced a quarter percentage point increase in its benchmark rate to combat inflation, hinting that further rate hikes may be nearing their end. Experts from the Mortgage Bankers Association (MBA) and the National Association of Home Builders believe this could result in even lower mortgage rates.
MBA’s Chief Economist, Mike Fratantoni, explains that the housing market was the first to slow down due to tighter monetary policy and will likely be the first to benefit as rate hikes taper off. Nevertheless, predicting the market’s reaction to the Fed’s decisions or the ultimate effects of the banking crisis on rates remains uncertain.
What All This Could Mean for You
If you have considered buying a home, it’s essential to be aware of the situation and prepared to lock in a low rate when the time is right. A lower mortgage rate could save you hundreds of dollars on your monthly payment, so you can’t afford to miss out.
It will also be crucial to work with knowledgeable real estate professionals (like us!) who monitor this situation closely as it unfolds. We can also refer you to a trusted mortgage professional who can help you get pre-qualified for a home loan.
A further dip in mortgage rates could bring more buyers to the market. These buyers may want to act quickly in case rates rise again.
Now may be the perfect time if you’ve been on the fence about selling your home. We can help you prep your home and get it listed quickly to take advantage of a possible increase in demand.
Depending on the terms of your current mortgage, you could save a bundle by refinancing if rates fall significantly. Let us connect you with a mortgage professional to discuss your options.
What Steps You Should Take Now
You want to take advantage of this potential window of opportunity! Please reply to this email or call us today to schedule a free consultation so you can be prepared.
And as always, don’t hesitate to ask questions about this or other real estate issues. We would love to hear from you!