Video
August 30, 2024
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August 30, 2024
Feeling Hesitant About Buying a Home? You’re Not Alone
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Feeling hesitant about buying a home right now? You’re not alone. Even with improving mortgage rates, many are uncertain about their next move. Mortgage application volume only rose by 1% last month and is down 8% for the year. Whether it’s the back-to-school season, the upcoming election, or fear of making the wrong decision, it’s understandable to feel cautious.
But there’s good news: inventory levels are rising for homebuyers, and those WILLING to buy now are likely to benefit in the long run. Home values continue to increase, making this a potentially opportune time to enter the market.
Wall Street seems content with where mortgage rates are, as they’ve already priced in a 0.25% reduction expected at the Fed’s September 18th meeting. If the Fed decides on a 0.5% reduction, we could see mortgage rates drop even further.
On the inflation front, PCE (Personal Consumption Expenditure)—the Fed’s favorite measure—came out tame today. Core PCE, excluding volatile food and energy costs, remained steady at 2.6%, close to the Fed’s 2% target. Interestingly, if we annualize Core PCE over the last three months, it’s below 2%, and we believe there’s a good chance it will hit the Fed’s target by the end of the first quarter of 2025.
The economy’s strength is another piece of the puzzle. The jobs report next Friday will shed more light on whether new jobs are being created and how strong the economy really is. Anecdotally, a credit processor in my business group mentioned that 14 businesses he services have recently shut down, mostly in retail. It’s the most he’s ever seen, which suggests that some consumers are feeling the pinch.
Credit card debt continues to break records, with Americans’ total balance reaching $1.142 TRILLION at the end of the second quarter. Meanwhile, the savings rate has shrunk to 2.9%, down from around 8% before the pandemic. Savings accounts are being depleted, and reserves are running low.
If the economy struggles, we could see further cuts in the Fed Funds rate, which would result in even lower mortgage rates. So, while it’s natural to feel hesitant, those who are prepared to buy now could be positioning themselves for long-term success.
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The information contained is the viewpoint of the presenter(s). Individuals should consult their own financial representative.
Estimated Mortgage Payment is for exemplary purposes only. Contact a licensed loan officer for exact numbers and APR. Additional rates and terms may apply and are subject to change without notice. Loan scenario assumes a purchase price of Zillow's list price and a 10% down payment. Points and fees not included. Property tax, homeowners insurance, mortgage insurance, and HOA fees are approximate and may vary. Other fees may apply. Product displayed is a conventional 30-year fixed rate mortgage using the current average rate as shown on Mortgage News Daily (mortgagenewsdaily.com).
Estimated Qualifying Income assumes a homebuyer has a FICO score above 740, no other credit debt, and a debt-to-income (DTI) ratio of 43%.
For exact numbers and APR or to run a loan scenario based on your own credit and income, contact our office at (858) 259-8700.
Rate Source: Mortgage News Daily. Rates displayed are approximate, subject to change, and do not necessarily reflect rates available to you. MND’s methods involve an objective component based on lenders' raw prices as well as a subjective impression from their network of originators. For more information about how these rates are calculated, visit www.mortgagenewsdaily.com/mortgage-rates/about.
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Equal Housing Opportunity. All loans subject to underwriting approval. Certain restrictions apply. Call (858) 259-8700 for details. All borrowers must meet minimum credit score, loan-to-value, debt-to-income, and other requirements to qualify for any mortgage program. CrossCountry Mortgage, LLC is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the federal government. CrossCountry Mortgage, LLC is not affiliated with or acting on behalf of or at the direction of the Veteran Affairs Office or any government agency. Certificate of Eligibility required for VA loans. By refinancing, the existing loan total finance charges may be higher over the life of the loan.
