We've just experienced a spike in interest rates, leaving us wondering
.... will they go back down? None of us have a crystal ball, but here's
some compelling foresight courtesy of Joseph Rose of Perl Lending:
This isn't easy to say, but it must be said - rates are NOT going back
down (at least not significantly). Rates being quoted right now range
from the 4.75% area to above 5%, based on lender, consumer profile
(credit score, program, money down, etc), and the day. When I say "the
day", I'm not being flippant - there really is such nauseating
volatility that we are seeing rates jump by as much as .25% in interest
rate in a single day.
With the drastic and dramatic jump we've seen since May 3rd, consumers
may have thrown the brakes on for looking at houses - waiting for rates
to come back down. It is important that you are able to work closely
with your favorite Mortgage Loan Originator to convince the consumer of
1) Rates are NOT going back down into the 3's, or probably much (if any) below 4.5%.
2) They must continue their search now before home prices continue to go
up along with the higher rates, further eroding their buying power.
This is a difficult conversation, and an even more difficult sale - but
it is easier if you work in tandem to educate the consumer so they
understand why these facts are true and are able to move past the
negative emotions involved and get back in the saddle of finding that
new home. You see, when rates move as drastically as they have
recently, consumers are going to follow the Kubler-Ross Grief Model
(Denial, Anger, Bargaining, Depression, Acceptance) before they are
ready to move forward.
So when you've gone through and all done with denial, anger, bargaining,
depression, and acceptance - know that interest rates are still good!
...hey, they were like at 18% a couple decades ago... :)
Happy Buying, Selling, and Refiing!
Caroline Choi Real Estate
Caroline Sells The City LA