Find out how to find the cheapest mortgage rates once you understand the changes in the Mortgage Market in Metro Detroit MI & save money t the same time.
What’s happening with Mortgage Rates, now and in the future?
One word …UGLY. Rising mortgage rates are no doubt one of the biggest factors impacting the housing market right now. The weekly shift in mortgage rates has been crazy, check this out! . As inflation rises and mortgage rates climb, many may see their purchasing power shrink and their dream of homeownership fade. My recommendation, stay away from Big Box Banks that are using The Feds Cash. We need to shift to the private banking system that will use its cash and set its own rates. I’ll explain more as you work through the blog post. The one Housing Market trend I am watching closely is the Metro Detroit Home Price & Trends, you can too.
First, an Important Econ Lesson What Caused the Rates to Go up
The Federal Reserve doesn’t set Mortgage rates, they follow the 10-year Treasury Yield. Typically, Mortgage Rates average adjust up around 2% over the 10-year yield. Here’s the rub…The Federal Reserve does set monetary policy and that certainly affects Mortgage Rates. Due to the Feds wanting to get inflation under control as well as the Treasury wanting to get their debt off the books Interest Rates and Mortgage Rates are up. The Treasury started a bond dump in December. That’s why we started to see an increase in Mortgage Rates starting in January. Now throw in the Federal Reserve’s changed monetary policies the best I can track was in April of 2020.
Due to the pandemic both the Federal Reserve and the US Treasury started propping up the economy. Between 2-9-2020 & 2-13-2020 we still had a 2% gap up between Freddie Mac’s 5-year Trends (3.47% Mortgage rate) and 10-year Treasury 5 -year Trends. (1.58% Yield ) Now let us move to March when the County is shut down and the Feds are scrambling on how to keep everything moving and new policies were being set, and Treasury is taking on debt. Let’s see the shift up from April 3 to the 5th 2020. Freddie Mac PMMS was at 3.33% on 4-3-2020 and the 10-year Treasury Yield on 4-5-2020 was .60%. That’s close to a 3% gap up in Mortgage Rates.
The Federal Reserve changed the Monetary Policy
That also explains why the economist got it wrong when they were predicting future Mortgage Rates. Like myself, we’ve been following the yield trends for years and were using the 2% calculation over the yield. Due to the Federal Reserve moving the cheese and I didn’t pick it up shift because the rates were so low. I couldn’t figure out what the heck was going on with the Mortgage Rates being so much higher than the Yield Rate. Now I know and my crystal ball is fixed…Keep reading I have a workaround for these high rates as well. It’s important to know the back story so you can make better buying decisions moving forward.
A Look Back: How the Current Mortgage Rate Compares to Historical Data
One factor that could help you make your decision to buy now is how today’s mortgage rates compare to historical data. It’s hard to grasp the mortgage rates so much higher than the average 30-year fixed rate in the past 2 years. When you look at the bigger picture we are still comparatively low seeing we are trying to get the economy back on track after a pandemic, huge debt, inflation, gas prices, and the war in Ukraine it could be much worse. Look at the Morgage Rate during the last housing boom… yikes 8.62%.
Freddie Mac Mortgage Rates ( Fed’s Money)
Due to the instability of the U.S. 10-Year Treasury Yield, keeping up with mortgage rates on a given day is impossible. Freddie Mac PMMS graphs the U.S. weekly average mortgage rates. The rates are bouncing around so much it’s easier to calculate an average. The points you pay to buy this rate are also jumping between .07 to .09 and they will be added to your closing cost. So when shopping for rates ask for the fees/points you will be paying. It will be important to check what type of programs are available and discount rates and if it’s worth getting a mortgage through Freddie or Fannie. May private bank, investor, or credit union is a bitter fit.
Track the 10-Year Treasury Yield and Find out How to Save Money💲
So, we have 2 problems regarding the Mortgage Rates. The Federal Reserve trying to get inflation under control by setting monetary policy, and The Treasury getting debt off its books. So, every day I track the 10-year treasury yield looking for a pattern in the trends if mortgage rates will go up or down. I’m using the 3% calculation gap. Understand these mortgage rates trends are going to be for banks using the Feds money through Freddie and Fannie to replenish their cash for future loans. This will be a great comparison to see where the Feds mortgage rates are heading.
How to Save Money
Your goal is to find lenders that are using their cash for the loan and are willing to compete for your business. They are not pushing the loan through the Freddie or Fannie underwriting system for cash, they are using their own so they can set their own mortgage rates. My feeling is with the rates this high, we will see more investors in the mortgage market again like Country Wide or Lehman Bros. Maybe this is what the Fed’s plan is all along to ease up on them holding all the paper for loans. Maybe they want to scale down their position in the mortgage market. Find an independent bank ~ investor or credit union that is offering a lower mortgage rate, they are out there. I’ve seen as much at 1% depending on credit score and loan amount. Not sure where to start? 🙋♀️ Contact me I can help.📲 cell at 248-343-2459 or 📩 email
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Step #1 ~ Do You Homework to find the Best Lender and Program for You
💥 Important 💥 We’ve seen many changes lately with high mortgage rates and now lenders are designing special programs to help you and compete for your business… Great News!
Important Do’s and Don’ts
✅ Do ~ Find out your FICA Score not your credit score. Check with your banking institution, they usually provide free FICA Scores. ✅ Do ~ Pull a free credit report from you bank or Free Credit Agency. ✅ Do ~ Call around and check out and get quotes for rates and what type of programs different lenders have available. Give the lenders your FICA score to get quotes. ✅ Do ~Find independent banks that are discounting rates because they are not using the Fed’s Money to lend. Give the lenders your FICA score to get quotes. 🛑 DON’T ~give out your Social Security Number as they will pull your credit. Wait until you select a lender and a program that works best for you then make an application. You’re getting rough quotes for now based on the FICA score you obtained, it doesn’t have to be exact for now. You’re in the weeding-out phase of your search. ✅ DO ~ contact me with any question you may have via my cell at 248-343-2459
🙋♀️~ Not sure where to start?
Get Your Do’s and Don’ts during the loan process. I do have lenders I’ve pre-screened based on low fees, special programs, rates, and best service. Let’s connect and discuss your options. You can also check with your Bank or Credit Union. Just don’t give out your SS# so they can’t pull credit until you’re ready.
The best way to prepare is to work with a trusted real estate advisor
My recommendation asks them questions and read what they write. Do they understand the housing market trends and how the rates can affect your bottom line?
You have 2 types of agents
1. agents that provide service through education 2. or an agent that opens doors and looking to collect a check when you get an accepted offer. Which one do you want?
Step #2 ~ Your 🔑 To Home Selling and Buying Success ~ Safe e-Guides
💥 Important 💥 Your Guides also have educational videos and links regarding where home prices are heading, mortgage rates, Housing Market Trends, and more.
Watch Video for Sneak Peak
Don’t muddle through the Home Buying and Selling Process. Buying a new home is a dream for all of us, and it’s an emotional and stressful process. It also involves the most significant financial transaction you probably will make in your lifetime.
Get Both Your Home Buying and Selling Guides
Your Buying Guide…will walk you through tips, strategies, and how to understand the numbers to strengthen your negotiation power.
Your Selling Guide…It will help you work through the selling process using the latest in high-tech market tools, so you make MORE Money. Our goal is to separate your home from the competition and keep Buyers focused on your house. The Selling Guide is very detailed and works step-by-step, so you’re guaranteed Top Dollar for your home.
Step #3 ~ 💥Search Better Than a Realtor💥 on a Platform that was Designed by One.
Find Your Ideal Home Here ~ Pre-loaded Home Search: Newly Listed ~ Coming Soon ~SOLD ~ Luxury~ Waterfront ~ and More🤩
Create an account and save your favorites and email updates. Another huge feature you can modify and look for homes Coming Soon only, or view homes that have been on the market X number of days. Maybe a 1st floor primary bedroom or office is important. You can even search by lot features like Finished Basement ~ Golf Frontage ~ Water Frontage ~ Acreage ~ Large private treed lot ~ Cul-de-Sac and More.
Bottom Line: Increased Mortgage Rates
The good news is you’re not in a bidding war spending several thousand over the list price to buy a home. We’ve seen a stall in the home price going up depending on location and price range. Take advantage of a cooler housing market and buy a home that meets your needs now with a discounted rate and refinance later. Let’s connect today so you can better understand your budget and be prepared to buy your home even before rates climb higher.
Simplifying Real Estate Through Education
As we move forward, it’s been challenging as we navigated through all the changes. Take a peek into my crystal ball…review the Housing Market Prediction Report eGuide. Putting your dream of a new home on HOLD shouldn’t be one of them. Now more than ever, knowledge will be your power. Know the Market You’re In and your Negotiation Power. Check out Categories for additional updates regarding the Housing Market | Home Buying | Selling for More Money
If You Need To Sell 1st…
Keep Buyer Focused on your Property vs the competition
With the increase in mortgage rates is stalling the housing market and in some cases home prices. I’ve secured independent banks and investors that are willing to compete for your business. We can offer the buyer a discounted mortgage rate to purchase your home vs your competition. We will offer more value so they write a good offer. I sold homes for top dollar during the Great Recession, so I dusted off my playbook. It’s time to play ball.
Marketing Your Home
No 2 homes are alike, and agents need to 🛑 marketing ONE size fits all. We no longer have an exposure problem (internet). Your home is buried on public home search internet sites. The only way to compete on those platforms is the price. If you want more money, you need to apply Influence. Separate your home from the competition, so the Buyer sees value. Keeping them focused on your property and not getting lost in homes’ inaccurate data on public internet sites is necessary. Having digital omnipresence on serval platforms is your key to success. Remember MORE INFLUENCE = MORE 💰. We have details on how you can utilize High Tech Marketing and Win!
If you have any questions, contact us: Chatbot 🤖 at the bottom. Contact me by Email 📩 or my Cell 📲 @ 248-343-2459. Would you mind sharing your thoughts below or what future article you would like to see? Your opinion is important to us…. this site is for you.🤩 To Keep up to date request our 🏡 Chat Newsletter or Follow us on Facebook, Instagram, or YouTube.