MortgagePoint July 2023

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July 2023 » 53 July 2023 T H E P O I N T elevated year over year, but there's been a lot of things that people have been able to do such as obtain adjustable-rate mortgages or refinance pain points on a loan to get a lower rate. These mortgage payments that the typical buyer has right now, even on recent home pur- chases, have been more in line with incomes. The Mortgage Bankers Association (MBA) tracks how much mortgage payments are for people going into contract on a loan, and over- all, it's tracked fairly well with incomes. People have not been over-leveraged in housing, and they haven't been stretching their budgets significantly for housing since the [mid-2000s] housing bubble. Q: What advice would you give to someone who is looking to buy or sell a home right now? My advice is to stay aware of mortgage rate changes, find a good local lender, and shop around for rates so you know who's giving you the best rate. Stay in constant communication with them as the situation evolves. Rates have been extremely volatile over the last year, and as you know, the chances that you could save hundreds of dollars on your mortgage pay- ment in just one day compared to a week ago is pretty significant. It's more important than ever to stay in close communication with your lender and be aware of mortgage rates as those big changes happen. It opens opportunities for how much home you can afford, what housing options you might have, and what things you need to do to mitigate those higher payments when rates do increase. Buyers need to be aware of those risks. There's also been a lot of schemes that people have used to help with these rates. For example, many builders have offered rate buy-downs, and you can ask sellers to give some concessions in a lot of places in the country to help mitigate those higher rates. Don't give up as a buyer, even if you're discour- aged, but try to stay on the sidelines and stay in communication with lenders to see what opportunities are out there. And it never hurts to make a lowball offer if that's what you can afford or if that's what you think the home is worth to you. Q: A recent report from Redfin found that the average rent is over $1,967. Is there any good news for renters? Is this sustainable long term? The good news for renters is the increase in asking rents has slowed down significantly. It was growing closer to 17% about a year ago. That pace slowed to basically stopped growing entirely in many markets. Rents are declining year over year, especially in the ones where rent is most expensive, like Austin or Seattle. So, the good news is that things have stabi- lized. You're also getting a lot more bargaining power right now as a renter; you have more options and oftentimes, landlords are having to give kickbacks to renters such as a free month's rent, a free parking space, or other types of deals, even if your asking rent is the same, and we're seeing more renter power in the market overall. Now, there are still places where rents are growing, and if you're moving, you are still likely to pay more in rent than you did a couple of years ago. But overall, the direction has been favorable and the most hope I can give is that there are a record number of apartments that are under construction right now. These multi- family units are under construction … there are millions of [unfinished units] in the pipeline that are set to hit the rental market across the country. As that new supply becomes available, it will continue to help push rents down. In some places, it's helping with afford- ability, and there's more of that to come over the next 6-12 months from what we can see in the permits and what's been started and is under construction. But yeah, overall, we're not expecting major rent declines nationally. You probably aren't going to save a ton, but at least you can expect stability, which means that, if you're waiting to move in six months, you're not going to face hundreds of dollars more in rent than moving right now, which was the case a couple of years ago. Magazine INTRODUCING The Five Star Institute's premier trade publications, DS News and MReport, have joined forces to become MortgagePoint. This new publication brings you the same exclusive news, features, interviews, and commentary you've come to expect from Five Star—now taken to the next level and all in one place. MortgagePoint is your one-stop shop for coverage of the full spectrum of mort- gage, from originations to default. Scan the QR code to sign up and learn more. THE INDUSTRY'S MOST VALUED PUBLICATIONS JOINING FORCES

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