Why This Moment Matters for Both Buyers and Sellers in Today's Market

Mortgage rates have hit their lowest point in 18 months, creating opportunities for both buyers and sellers as we approach the sweet spot before home prices increase.

Listen Now for All the Latest in this Monday Market Update!

Some Key Takeaways:

• Jobs report came in lower than expected, causing the 10-year treasury bond to decrease
• Some borrowers now securing rates around 5.875%
• Expected Fed rate drop next week should help solidify current bond market position
• For every percentage point rates decrease, approximately 5 million new buyers enter the market
• Many Sellers become motivated at 5.5% regardless of their current mortgage rate

Visit kevnikmortgage.com for weekly Monday morning blogs with shareable content for social media, including today's blog about the right time to purchase.

Chapters

• 0:00 Interest Rate Improvements
• 2:15 Refinancing Strategy
• 3:42 Home Buying Opportunities
• 5:22 The 5.5% Breaking Point
• 8:45 Contingencies and Buyer Programs
• 10:05 Educational Resources and Wrap-up

Transcript

Speaker 1: 0:37

September 8th and here is our Monday market update Nikki how are you?

Speaker 2: 0:43

I'm doing great. How are you doing?

Speaker 1: 0:44

Fantastic.

Speaker 2: 0:45

Good, so awesome, awesome, awesome news. As of Friday and again into today, we saw some major improvement in interest rates due to the housing or the jobs report, I'm sorry coming in lower than expected. This causes the bond, the 10-year treasury bond, to decrease, which will decrease mortgage interest rates. So I was able to lock a couple people in last week at 5.875. So we are definitely into that range, depending on your situation and qualifying Best news. I could have had all year, of course, to get us back down into those five, so hopefully that trend will continue. Another thing helping with this is that there is that expected Fed rate drop next week which should help kind of solidify the position of the bond market right now. That most of that improvement, or most of the expected improvement, has always already been reflected in mortgage interest rates. It's that that job report kind of just helped push it to the next level or to the next lower level or bring it down. So that's really good news.

Speaker 2: 1:44

In my conversations with clients, if you have people who are asking about refinancing is now the right time. There's a lot of media out there going rates are at the lowest they've been in 18 months. Yes, this is true, but we need to slow down and calm down. There's a strategy that comes into refinancing. My best piece of advice right now is for clients who are in that above 6% range above 7% especially let's take a look. However, there's going to be a price point or a rate point where it's going to make sense to refinance. We don't want to jump the gun too quickly. We expect there's additional rate drops through the end of the year. So my text out to my clients, my calls to my clients, are like I know you're anxious, we're watching, we're waiting, we're watching and we're waiting. We want to ride that wave down to the bottom as much as humanly possible where it makes sense, and then most of that time we're going to be waiting for about a five and a half. That seems to be the trigger point for a lot of people who are in the 7% and above range, people that are into the sixes. We're going to be waiting till the low fives and kind of just saying, okay, let's see if this makes sense. So, unless there's some other need, you need cash out of equity in the home, the taxes went up and you have two higher payments other things that might trigger you to want to refinance earlier than normal. Let's just calm down a little bit for rates to come down even further. With that said, on the flip side, let's talk about home purchasing. What this you know rate environment is going to do is it's going to start to stimulate your pipeline. It's going to start to get people to say, okay, is now the right time, is now. I've been waiting, I've been waiting, I've been waiting and again, great, that's awesome. We definitely wanna keep in touch with our pipeline.

Speaker 2: 3:25

For anyone that has even mentioned the word buying in the last year Relook at your interest rates, relook at your pre-approval. Get yourself into a position to strike while the iron is hot. The reason that I say that is there's going to be a point in time where interest rates are going to start coming down solidly into the fives, but then what happens is those home prices start to creep up because the demand is higher as these interest rates go down. So it's very important that we catch those clients in that in between, where the home prices haven't skyrocketed and the interest rates are still low. I think we talked about this, I want to say about a year ago, year and a half ago, when it was like, hey, we're in that spot again where we're coming into summer and interest rates are now down into the sixes as opposed to the sevens. We want to catch people in that in-between market so they can take advantage of the lowering interest rates before the home prices increase. Get in before the demand becomes increasingly higher.

Speaker 2: 4:19

There are a lot of homes sitting on the market right now. There's great deals to be had right now. I'm telling you, especially in the Arizona market, there have been homes that have been sitting on the market for 60, 70 days that have had little to zero activity, where you can start to make good deals. We are seeing some foreclosure activity also in the state, higher than what we would normally see this time of year. So in this market there could be some opportunities for you to be able to purchase a home in a smart way. And what do we always say? You make money when you purchase the home, not when you sell the home. So it's important that we reach out to our pipeline, start re-stimulating those buyers, start getting those people back in line and saying, hey, where are your interest rates at?

Speaker 1: 5:07

where are you pre-approved at? What can we do? What can we look at? Yeah, this is truly a sweet spot. Remind me of the stat every for every half a percent or percent that the rate goes down, how many buyers enter?

Speaker 2: 5:15

the market, five million buyers in the market For every percentage rate. The interest rates go down. So there is going to be increased competition, also with the oil prices. Opec has basically announced that they're going to increase their oil production, which kind of puts on hold the drill baby drill situation in the United States. That also affects the bond market, which could help lower those interest rates. So if that's what happens and OPEX increases their production and satisfies the need for oil and we aren't drilling within the United States, that could absolutely affect the amount of time it takes those interest rates to go down. That's a whole secondary discussion and a whole another Monday update for us to talk about. But all these factors are playing in. But, like I said, we're looking at those interest rates to start creeping down again and hopefully we'll start getting solidly into the fives that's not the five and a half range by the end of the year.

Speaker 1: 6:11

Yeah, yeah. So now, truly, truly, get in front of it is what I'm hearing. If you've had a perfect reason to be reaching out to any buyer who's put on hold, who may be lost out, who's even mentioned buying, if you can get them in the race in the market in the next month or two before it catches up and prices go up, the 5 million buyers are out there now, pre-approved and ready to go in your competition. Yeah, that's so true.

Speaker 2: 6:41

And just a couple other reminders. This goes for sellers too. Sellers are motivated at that 5.5% range, no matter if they have a 2% or a 3% or a 4% on their current mortgage. They are motivated once those interest rates start hitting that 5.5% mark. That's what the statistics tell us. That's what the surveys tell us. That's what all the data tells us is that 5. A half is kind of that breaking point. If it goes five and a half or under, a lot of people don't necessarily worry about their 3% to 5%. They're not going to go from 3% to 7%, as we know, but 3% to 5% isn't all that much of a stretch for them if they consider you know what they're doing from that standpoint.

Speaker 1: 7:16

Yeah, it's so true, and I did. I put a post out about new construction incentives and you know, once you get into it I found that that was only for existing ready to sell new construction, not build from the ground up some of those incentives buyer, when she was thinking and talking about it, it wasn't as painful going from the three point whatever to five and a half and she's been sitting and waiting and waiting. Doesn't want to be in the home, but we'll deal with it. You know so, if you can figure that out. So I'm going to reach out to her again today and see what that looks like now.

Speaker 2: 7:57

Reminder, like in that new construction environment, it's still competitive enough where a lot of those new builders will not take contingent offers, and so that's a huge deal too. That is expected to continue because as these interest rates go down again, demand is going to go up. So if you have a home to sell, you're going to want to talk to your realtor and see if they can negotiate a contingent deal, or talk to me. There are things that we can do to make you a non-contingent buyer as you go in to offer on different homes. Like, we have cash buying programs, we have equity, you can get equity from the prior home programs, things of that nature where we can really help you position yourself as a non-contingent buyer.

Speaker 1: 8:39

So, so, very important. I love it. No, that's amazing, great, great news. And now what do we do with it? So definitely, reach out to Nikki right away. Have your buyers reach out, anyone that was on the fence, any questions you have. It's so, so important to show up and get ahead of these other 5 million buyers. Self-side same thing If you have these sellers that are thinking about refinancing, get them in line with Nikki right away, because then you know, like she said, it's watch and wait, watch and wait, and when we can ride that wave at the bottom, when that makes sense. It's kind of like options and stocks you can watch it and watch it and then, when it hits, then you pull the trigger. It's not an emotional thing, it's a stat.

Speaker 2: 9:24

It's a business decision. Also, if you go to my website, kevnickmortgagecom, I do a Monday morning blog on that website as well. That is shareable content for social media. Today's blog is actually about the right time to purchase, talking about different things that within the market that could influence whether or not a buyer is ready to buy, and how to really overcome those objections.

Speaker 1: 9:47

Yes, perfect, go there right now, get it. And Nikki, I love that you have given us permission, as I let all agents know, follow Nikki online, go to her website. She is opening this up to us so that we can be educated and educate, which will set you apart as an agent on social media. So the solds are great posting solds all over the place but educate, and I found that agents that show up like you do as a lender really do much, much, not better or different, but they just come from a different contribution, a place of contribution, and wanting to help and wanting to educate. And if you can set yourself apart as the voice of reason, of education, of knowing, so when anyone thinks about real estate in your sphere, they're going to think of you because you're showing up at a different and much higher level Impactful, I guess.

Speaker 2: 10:44

Impactful, valuable, absolutely Education, relationship-based, you know things that really project long-term business.

Speaker 1: 10:51

Love it, awesome. Thank you, nikki. As always, this is fantastic. I will get this going, whether you're listening on YouTube, on the podcast, on social media. If you can comment, like on the podcast on social media, if you can comment like, subscribe, go to Nikki's website, support her, support the show. We just want to get the word out to as many people as we can and make an impact no-transcript.