Podcast - 2/16/24

🏠📉 What's Really Happening with Mortgage Rates? 📈🏠

Feeling confused about mortgage rates lately? You're not alone! Rates can seem like they're constantly changing, but here's the scoop:

1️⃣ **Volatility**: Mortgage rates are influenced by numerous factors, causing them to fluctuate daily. Economic conditions, Federal Reserve decisions, and global events all play a role.

2️⃣ **Zoom Out**: Don't get caught up in daily fluctuations. Instead, zoom out and look at the bigger picture. Overall, rates have trended down compared to last year, making it an opportune time to buy.

3️⃣ **Focus on Trends**: While rates may bounce around, experts predict a continued downward trend this year. So, don't let short-term blips distract you from the larger trend.

Thinking of buying a home? Ensure you're pre-approved to stand out in a competitive market. Pre-approval shows sellers you're serious and ready to move forward. Don't miss out on your dream home – get pre-approved today! 🌟🏡 #MortgageRates #RealEstate #HomeBuying

🏡 House of the Week 🏡
📍 2225 Village Square Rd, Frederick, MD 21701
💰 $450,000
🛏️ 3 bedrooms
🛁 3.5 baths
🚗 Detached 2-car garage
🏊‍♂️ Access to community pool, tennis courts, and clubhouse
🌳 Outdoor oasis perfect for gatherings
🍽️ Nearby town center with restaurants and shops

Don't miss out on this fantastic townhome in the Worman's Mill community! Schedule a viewing today. #HouseoftheWeek #FrederickMD #TownhomeLiving

Tom Whalen:

I'm Tom.

Jay Day:

I'm Jay.

Tom Whalen:

of Jay Day and the Day Home Team at LPT Realty with our weekly real estate podcast. Hey, you did a couple of podcasts with Andy for a couple of weeks there.

Jay Day:

I know, I know. It's what happens.

Tom Whalen:

Andy's a good guy, man.

Jay Day:

Yeah, and you need a breather every once in a while.

Tom Whalen:

Does Andy come with any questions? Any smart questions, any insightful questions that make you break your brain?

Jay Day:

He always has good questions, just like you do, but nothing to break the brain.

Tom Whalen:

Yeah, okay. But we're just trying to get along here, man. And we're both homeowners or Andy's a future homeowner, and so we both have lots of questions. That's why people listen to this podcast. What about mortgage rates? Tell us all about it right now. Everybody's interested in that. And tell us all about what should a person do? I mean, should you have all your ducks in a row, your finances before they even call you?

Jay Day:

Alright, those are two great questions, and a lot of people don't understand the importance of the pre-approval. And I'll get into details because that sort of ties in with the mortgage rates as well. So the most simple answer to everything is that the mortgage rates, they're volatile, period. They don't move in a straight line. There's so many different factors that come into play with them and they change. People don't realize the interest rate changes multiple times throughout the day.

Tom Whalen:

I see this, I see this because doing this with you now you got me paying attention to these things.

Jay Day:

I know. I'm sorry that I brought some boringness into,

Tom Whalen:

It's not boring. I find it fascinating once I've learned a little bit about it.

Jay Day:

Yeah, I mean, so the interesting thing is when you look at, and again, because this is a podcast and people can't see it, I want to show you this graph. This is a graph that just shows October, 2021, I mean October, 2023 up to February, 2024. Look at the volatility in that.

Tom Whalen:

Wow! Now what does that mean to me? Because I see a big dip in that graph.

Jay Day:

Yeah. So in October, we were in the upper sevens then, and I say upper sevens like seven, well, 7.5, 7.7. Then we hit a peak in between October and November that went just under 8%. And then we did a massive drop back in November, and then the rates went back up and then they dropped again in between December and January, and now they're going back up and then they dropped again in February, and then they did a quick spike back up. So I mean, the bottom line is the volatility is there. If you keep waiting and waiting one day, three hours can make a difference and what your rate is. The one thing I will say is, and what the graph shows is so far this year, we're still in much better shape than we were in October of last year. So as we know, rates can increase and decrease for the most part, the lowest we've gotten as I'm going to try and look in here, we hit numbers that were low sixes, upper fives with some points. Bottom line is the rates are going to change. They are going to be volatile. They're totally outside of our control. There's nothing you can do or I can do that's going to impact these interest rates. And now we've got reasonable rates. They're not bad, they're in the sixes and we know that it can hit close to eight. So my opinion is if you continue to wait, it may not get you the best results of what you want. And one of the other things that you ask the question about pre-approvals, we always have all of our clients talk to a lender beforehand because you don't want to walk into a house, you fall in love with it, then you talk to the lender. And then let's say, let's not say you don't get approved, but let's say I showed you a house. We're over in Worman's Mill. I show you a house, Tom, and you're like, man, I love this. This is perfect. This checks all the boxes. Then I have you talk to the lender and the lender tells you, oh, your payment is going to be $4,200 a month. You're approved, but you're like, there is no way I'm spending $4,200 a month to live here. Now everything I'm going to show you after that is not going to, because let's say your max comfort number is 3,500. So that's a decent difference between what you're approved for and what you're comfortable with. So now if I start showing you other homes that are that much less expensive, you're going to continue to compare them to what the one that was absolutely amazing

Tom Whalen:

When you got your heart broke the first time around.

Jay Day:

And the other part is with these interest rates changing and fluctuating so heavily, if you went from a six and a quarter today to 6.75 or seven tomorrow, and let's say that you were barely approved, the situation I just described was a little different. But let's say we were squeezing you by for that payment of 3,500 a month, and you were right on the cusp of not being able to go any higher on price, and the interest rates increase by half a percent, you may no longer qualify for that house. So getting your pre-approval and knowing where your numbers are is extremely important. And with our agents, we always make sure we inform our buyers, hey, the rates have changed. They went up quite a bit. Why don't we have our lender run the numbers on this house before we show it? Because these numbers are a little tight and let's make sure you're still comfortable. Let's make sure everything works. And we do the opposite. Let's say people were struggling and their budget was 3,500 a month, they didn't like anything, and we saw rates drop by three quarters of a percent. Well now's the time to say, hey, these rates have dropped. And guess what happens when the rates drop? Your approval amount increases. So it's at effect on both sides, and you may be able to get into a house that was out of your reach two weeks ago or even three days ago if the rates drop low enough. So it's all really, really crucial and really important to understand that the rates are, it's a roller coaster, Tom. There's no other way to put it. It's a roller coaster.

Tom Whalen:

If you've been approved for a loan, let's say, okay, you're approved, and then I come to you with this, and then let's say the rates go way up. It's still that original. You've been approved for this loan. You don't have to worry about the rates increasing between the time that you were approved and then,

Jay Day:

No, you do.

Tom Whalen:

Oh, you do? Then that will change. I mean, that can change from when you were approved.

Jay Day:

Oh yeah. Remember when the rates were really low and then they went up to seven, seven and a half percent. A ton of people no longer were approved. Or let's say they were approved for a $400,000 house. Now their approval dropped to 325.

Tom Whalen:

So that'll go away.

Jay Day:

Yes.

Tom Whalen:
That will go away. Man, that's why you've got to call Jay if you're thinking about any of this, man.

Jay Day:

It's a lot.

Tom Whalen:

It's a lot.

Jay Day:

Yes, it is a whole lot to handle. And a lot of people just don't understand. It's your lender and your realtor have to be working in unison, and they have to be on the same page to try to help you so you don't make a silly decision or get your hopes up on something, then realize it's something you're not comfortable with. Or the opposite, you miss out on a property because you think you aren't approved for it. But with the rate change, now you are. So it's an interesting dynamic. And when we see these massive spikes like I showed you, it's even more important because like I said, if you see that rates dropped by three quarters a percent or they went up or they went up by a percent over the course of one day, two days, three days, that's going to have a significant impact on what you can and can't do. If you're listening to this, if you have any questions, go to dayhometeam.com. You can fill out the form, we'll get in touch with you. Or you can call us at (866) 702-9038. Again, (866) 702-9038. We're more than happy to talk with you and explain how all of this stuff works and make sure you have yourself in a position where you know what's going on and you have someone in your corner on the financing side and on the real estate side that's going to get you to where you need to go.

Tom Whalen:

And you have some lenders that you guys that work with regularly that you approve these people?

Jay Day:

Yes, and we have worked with them personally or some of our teammates and family members. So all of the vendors that we work with, we have personally utilized in our house or our agents have used them in their home or their family's homes.

Tom Whalen:

That's what we want to know. Got a home of the week.

Jay Day:

I do buddy. This one, speaking of Worman's Mill brought it up earlier. I forgot all about that. 2225 Village Square Road in Frederick, Maryland. Townhome listed at 450, as I mentioned. It's in Worman's Mill. This is an interior townhome. It has a detached two car garage, three bedrooms, three and a half baths, open floor plan, custom built-ins, crown molding. All three levels are finished. So it's got a finished basement in the basement that includes a full bathroom and two additional rooms. One of those actually has an electric fireplace. The backyard of this place is pretty cool. It's a neat oasis when you go out, you have paver patio and then you have an outdoor kitchen, hard plumbed in for natural gas.

Tom Whalen:

Those are so cool outdoor kitchens. That's awesome, man.

Jay Day:

So it's a great entertainment option. The other thing is they actually had gas put in, so the garage is heated and they also added a window unit. So technically the garage you could be hanging out in as a hangout if you don't want to park your cars there. Yeah,

Tom Whalen:

Yeah, man.

Jay Day:

It's cooled and heated. And then also the biggest thing with Worman's Mill, the access to the community pool, the tennis courts, a clubhouse, and then you've got the town center that has a variety of restaurants and shops. I know that my wife and I go to both of the restaurants over there on a regular basis. We just go Gas House Pike, up Monocacy, turn into Worman's Mill. And from what I understand, I'm not a tequila drinker, but my wife says the margaritas over there are at Plaza Mexico are to die for.

Tom Whalen:

Quality of life,

Jay Day:

Yeah, buddy.

Tom Whalen:

Where you live means everything.

Jay Day:

Yep. So if you want to check out this house, go to WFRE.com. Look up Tom and Jay's Real Estate podcast. You'll see all the photos. If you like what you see, you can click the button to schedule a private showing. And like I said, reach out to us. We're happy to get you in. If you have any questions, we're here for you.

Tom Whalen:

I'm Tom.

Jay Day:

I'm Jay Day.

Tom Whalen:

of Jay Day and Day Home Team at LPT Realty. Thank you so much. Listening to our weekly real estate podcast. Tell your friends all about it.

Post a Comment