Hey fam, it’s another glorious Sunday and we’ve got plenty of new
market observations for you!
Refi’s are BOOMING! You may have noticed that everyone from your
uncle, your neighbor, your ex-husband’s cat and your mom have all been
getting refinances. In fact, the refi market has been outstandingly
strong for months now and just seems to keep getting better. We
recently saw the Fed make some adjustments to curtail the impact from
this as mentioned in our last update. Does this mean the refi boom is
coming to an end? Are you scared you missed out?
NO way fam! This refi season is just getting started. According to Black Knight mortgage data firm, refinances accounted for $1.1 trillion in originations this last quarter.
The stats show that there are still 43% of ALL current homeowners who
are strong candidates to refi out of their 30 year mortgages. That’s a
huge untapped market yet to be touched. Economists predict that low
rates will continue into 2021 giving many more consumers ample time to
look into refinancing. It’s a great time, but keep in mind that the
process is taking longer for most lenders because of the pandemic and
a huge influx of refinances surging the market. The pandemic is
causing many essential workers in the loan origination process to have
to work from home so businesses are adapting. With some patience, it’s
still a great time to refi.
As far as purchases, it is a seller’s market. This doesn’t mean you
shouldn’t buy, however buying is more difficult right now. Prices are
decent, mortgage rates are low, and there’s nothing better than owning
your own home. With this pandemic you’re looking at a much longer
closing process. PLEASE keep this in mind if you’re buying and ending
a lease in your current place. Your lender is doing everything they
can to get you into your new home as quickly as possible but closing
times have been delayed so don’t put yourself into a position where
you’re homeless for two weeks! Another pro-tip for buying in a seller’s
market is to buy under your means and offer above asking. With every
house having 3 offers or more, you want to set yourself up to have
your offer accepted on the first try. If you’re a seller all I can say
is it’s never been easier. Depending on your area, you can count on
multiple offers, potentially above asking. Pending sales are up 25%
from this time last year and increasing.
Even more positive news is that mortgage forbearance continues to
drop! Fannie Mae and Freddie Mac loans in forbearance have dropped for
the 14th consecutive week. Overall mortgages in forbearance are down
to 7%. Mortgage applications were up 33% just in August and we’re
eager to see the upcoming numbers for September. Phenomenal figures my
An interesting change I’ve noticed in the market is how more people
working from home affects home ownership. We are used to relying on
finding a home close to our place of work. Sometimes that means
affording a home is not possible based on the area. With millions
adjusting to working from home as a temporary and possibly permanent
solution, the avenues for home ownership are opening up. More
affordable communities that aren’t in proximity to the workplace are
now being considered as starter homes for many millennials and adults
up to age 38.
In such a volatile unpredictable time, no matter your situation;
whether you’re buying, selling, or dreaming, let’s have some love and
patience for each other. Fam, thank you for all your support and
remember that your lender, loan officer, broker, processor, appraiser,
underwriter, and so on are working around the clock to keep loans
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