Find out how to find the cheapest mortgage rates once you understand the changes in the Mortgage Market in Metro Detroit MI & save money at the same time.
Inflation and the Housing Market
Good News! Inflation went down in November to 7.7% and the 10-year Treasury Yield went down 2% so mortgage rates followed. (detailed info below) In the last 3 weeks, the mortgage rates have stayed steady at around the 7% + or – depending on the day and if the 10-year yield is way up, your credit score and loan amount. The Federal Reserve raised Interest Rates another .75% and the stock market climbed back up. Investors are in greed territory and not investing in bonds, so the 10-year Treasury Yield rates went up again and mortgage rates followed. If you’re following today’s housing market, you know two of the top issues consumers face are inflation and mortgage rates. Let’s take a look at each one.
My recommendation
Find private banks that are using their own money to lend and set their own rates under Freddie or Fannie. I have a private bank right now that is using its own money to fund loans and the rate lock is 5.99% until the end of the year. I have additional ways to save below. My hope we have banks start lending the way they did before the crash of 08 and offer rates under Freddie and Fannie. I would work through the rest of the blog post to you understand there is a difference between Interest Rates and Mortgage Rates.
Inflation
This year, inflation reached a high not seen in forty years. For the average consumer, you probably felt the pinch at the gas pump and in the grocery store. It may have even impacted your ability to save money to buy a home.
While the Federal Reserve is working hard to lower inflation
The September data shows the inflation rate was still higher than expected. I will update with November data around the 13th, so circle back to see where we are heading. This news temporarily impacted the stock market and fueled conversations about a recession. It also played a role in the Federal Reserve’s decision to raise the Federal Funds Rate again. So, what would happen to mortgage rates if we are in a recession? I pulled the last 6 recessions and in all cases, the rate went down. What was interesting was how high they were then compared to now. The mortgage market is working its way back to normal.
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 a private banking system that will be using their own cash and setting mortgage rates. I’ll explain more as you work through the blog post or watch the video ☝. The one Housing Market trend I am watching closely is the Metro Detroit Home Price & Trends, you can too.
First, an Important Lesson What Caused the Rates to Go up
Who Sets Mortgage Rates
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. Back in April 2020 with the 10-year Treasury yield so low, the Feds bumped the gap between the yield and the mortgage rate from 1.75 – 2% to 2.75 – 3% and that is where it remains today even thou the Federal Reserve increased interest rates several times. 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 Feds are choosing to keep rates high.
My Prediction
After the last housing crash, congress changed the mortgage and appraisal rules. Dodd-Frank became law. By now, most of the big bank investors in mortgages, like Lehman Bros, Indy Mac, and Country Wide went bankrupt. After the crash, the banks followed the Freddie and Fannie Mae Rules and sold the loans to the Feds in order to replenish their cash flow. That put the Feds in 1st place for the largest Mortgage Investor and the banks are sitting on Billions.
I’m thinking…
The Feds want the banks to have skin in the mortgages again and will keep Freddie and Fannie rates high. If banks want to stay in business, they will need to compete for business, use their own money and start setting their own rates. I think the Feds want to change how Freddie and Fannie do business.
A Look Back: How the Current Mortgage Rate Compares to Historical Data
Look at the Mortgage 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.
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 market is fragile and could be in trouble. 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. Some experts are predicting that Treasuries will tumble and the turning point is near. Where the yield goes mortgage rates follow.
Track the 10-Year Treasury Bond to Time the Mortgage Market ~ For Fed Money Only
How to Save Lots of 💲💲💲
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.
There are a few considerations for now
- The lender is using their money through investors for Conventional ~ FHA and they can set their own rate.
- Consider an ARM ~ The rate is lower & less in fees/points. These programs have been overhauled so there is no longer a balloon at year 5. It’s a conversation you should have with your lender.
- Lenders that are still using The Feds cash. You’ll have the Federal Rate but you can ask the Sellers for Concession to buy your rate down the 1st year by 2% and the 2nd year by 1%. By year 3 you can re-fi if rates are lower or they go up to the rate it was when you originally locked. Here is an example.
My Crystal Ball is Telling Me ~ We May See More Investors on the Market
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. Now more than ever find a pro that understands Mortgage Rates. Not sure where to start? 🙋♀️ Contact me I can help.📲 cell at 248-343-2459 or 📩 emai
Have a Question ~ Tech Support?
Prices even for homes are determined by Supply & Demand. I just finished a blog post regarding the importance of tracking home prices. The key here is finding a pro that has pivoted and found solutions to help home buyers save money on their interest rates. Equally important, is to help Sellers with discount brokers as well. That way the potential buyers stay focused on their home vs the competition, see the value and write good offers.
If you find this information useful, like it and share it with your friends and family.
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!
✅ 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
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 your bank or Free Credit Agency. ✅ Do ~ Call around and find independent banks that are setting their own rates. Check with your Credit Union as well. ✅ 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🤩
I’ve programmed the home search platform so you now have direct access to the Multiple Listing Service so you can search BETTER than a Realtor. Better yet, you can customize your features, tech support and you can schedule an appointment right online.
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!
Have Questions?
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.
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