The market is very volatile right now, and there’s no clear trajectory—no one really knows where things are headed.
Though coronavirus has dominated the news as of late, this wild market has its origins four or five months back with the tariffs and trade wars. At the beginning of that period, mortgage rates had begun rising, but have since trickled downward to the 50-year lows reached in just the past couple of weeks.
Whether these rates remain low will be contingent on the health of the markets. The virus has already had a serious effect on the equity markets. As of the recording of this video, the Dow was 4,000 points off of its all-time high. Everyone is playing it safe with their money, as the fear of uncertainty looms large.
The real estate market, in particular has been fantastic, though; a buyer looking at a $250,000 home today has the same level of affordability on that same type of house as they did five weeks ago.
Anyone who’s bought a home in the last three or four years at 4% should consider reaching out to their lender to see if they can’t take advantage of a refinance.
Who are the people that shouldn’t be refinancing right now? Those who have a short-term plan to sell their home shouldn’t bother; refinances boil to the cost, the savings, and the recoup time.
If your cost is X, your savings is Y, you have a recoup time of three years, but your intent is to move within a year and a half, you’ve just spent more elsewhere to see savings on your monthly payments.
With increased buying power, more people are entering the market, especially at the $150,000 to $200,000 mark. We’re still having inventory problems, and this is frustrating many buyers. Property values are creeping up really quickly, and in some neighborhoods like Westminster we’re seeing neighborhood highs.
As is always the case with market overviews, general trends matter, but your specific situation matters more. If you have additional questions about the information covered in today’s message, or would like to meet with us and find out what’s best for you, feel free to call or email us. We would love to speak with you.