Welcome back to Cheddars. News wrap the once white
hot housing market is rapidly cooling but housing prices are
still on the rise, hitting a new record for
existing homes last month at the same time, mortgage
rates are also climbing currently standing at 5.5% for a
30 year fixed loan, which is nearly double what
it was last year. So what's a Homebuyer supposed
to do, joining us now to make sense of
the current housing market is mike Matthew garland or MG
, the mortgage guy, co host of real estate
podcast, the ransom gem show and co founder of
invest fest. So Matthew, let's start with home
prices. If demand is down and rates are up
, shouldn't prices go down as well. And wire
price is still on the rise. You would think
that prices would go down. But in this market
it's all about supply versus demand. Housing market is
still short millions of homes. Home sales are decreasing
at a rapid pace, but there's not enough homes
for the buyers that are still out there that can
still be able to afford homes. So when you
see sellers are listing their homes at lower prices,
but there's still less homes on the market for sale
. So that's why you're still seeing home prices continue
to go up. And even with interest rates going
up, there's still a lot of people out there
that can still afford these higher, mortgage rates.
You know, historically a 5.5% interest rate is still
at a historical um low, it's not 2.5 3%
as it was a year ago, but it's still
affordable, good mortgage rates. So the man is
still there and people are still buying homes now at
the same time, mortgage and refinance demand is falling
as rates go up. And as the mortgage guy
, where do you see rates going in the future
and will they ever come down again to the rates
we've seen over the past few years? I don't
think we're ever going to see those type of rates
again. I think that was once in a lifetime
opportunity during the pandemic. But I do see rates
going up if the Feds continue to raise the federal
funds rate. So you could be, you know
, a point to a point and a half percent
higher than we are today. So we could be
hitting 6.5 to 7% by the end of the year
. But I do think there's a light at the
end of the tunnel for Homebuyers. Right. I
think in the next couple of years, the Feds
will have to restart the economy by lowering the federal
funds rate again. And then we could see an
opportunity for a lot of buyers to go out there
and refinance and probably 2 to 3 years. So
yes, I do see rates coming back down,
but I don't see them going back to the 23%
maybe 2024 25 you'll probably be somewhere around four or
4.5% around there. All right now is demand really
going down or are people just waiting out the market
? I think it's a little bit of both.
Right. There's a lot of buyers that are not
gonna be able to afford these, these heart rates
on top of everything that's happening. Gas is going
up, Food is going up. I mean everything's
going up, right? So there's a lot of
people that are gonna pull back because they just can't
afford it. Right? But then there's also a
lot of buyers out there that are waiting for a
crash. Everybody wants to wait to see what's really
gonna happen with this market. But there's still a
lot of buyers that are out there in the market
. So it's still a good opportunity for those who
can't afford with inflationary prices to still go out there
and buy now for those people who are first time
homebuyers and have to buy in this market. What
advice do you have for them man? It's so
much different. Right, first of all, um
there's a difference between eligibility affordability just because a bank
can approve you for a loan doesn't mean you can
really afford it. So make sure you're checking your
spending, make sure you're checking your numbers because it's
not just your mortgage payment. You gotta think about
gas, electric, cable, maintenance. So there's
a lot that comes into home home ownership. So
you have to make sure that you can truly afford
it, especially because everything else around us is going
up, um, work your numbers, pay down
debt is also another thing, right? You don't
want to have high credit card bills and then trying
to buy a home in these higher markets. So
make sure if you can paid down as much credit
card debt Um as possible to lower your overall debt
to income ratio. But overall be smart, right
? Be smart when you're going out there, when
you're shopping for homes, don't bite off more than
you can chew. Look for homes that's been on
the market for 60, 90 days plus and look
for homes that need repairs, right. Those are
the opportunity in the hidden gems that's in the market
today. Now, what about those of us who
own homes right now, who are looking to sell
or refinance, what advice you have for us?
Well, equity is up, right. Um although
home prices are dropping a little bit, there's still
a lot of equity in in our homes today.
So if you're looking to refinance, I probably wouldn't
recommend doing a refinance because nine times out of 10
you probably refinance when rates were in the tool.
So it's probably not a good opportunity for you to
do that. I would look into a home equity
line of credit where you can possibly pull out that
equity and to invest into other things. Now if
you're looking to sell. Well that's the big thing
, right? The best advice I can give the
sellers is this is not 2020, this is not
2021, right? You're not gonna have 50 offers
above asking price. Right now. There's a special
type of buyer out there right now. So you
have to price your home accordingly. You have to
make sure when you're presenting your home, it is
neat, it's tidy and it looks Amazing because these
buyers are gonna be picky nowadays and you should also
offer incentives. Right? And that's the one thing
that I try to tell my sellers, Hey,
instead of lowering your price by 10%, right,
if you have a$500,000 home, 10% is 50,000
, why not offer to buy down the interest rate
To make it a little bit more affordable? We're
gonna have to leave it there today. That's thanks
to Matthew Garland. He is the co host of
the real estate podcast, rants and Gems show and
co founder if invest fest