5.5% rates are on their way. Call your clients and educate them on the cost of waiting. All the data shows mortgage rates are headed higher. Many of the floors of resistance in Bond prices have been broken over the last two weeks and we are heading down to the next floor of resistance which happens to be the 200 day moving average.
That would translate into 5% rates. That level isn’t expected to hold and rates will go higher. If you look closely at the chart it is a mirror of what happened last year. Show this to your clients. I have many that are on the fence waiting for the rate to hit 4% again or 3.875%. Well that time is gone.
If interest rates increase by 1% and go to 5.25% your client will lose 10% in purchasing power. Check out this chart to see how much buying power a client will lose as interest rates move up. So if they qualify for a 200,000 Charleston mortgage with a $983/month payment at 4.25% now. When rates go up 1% they would have to take a $180,000 loan to keep the same payment.
Charleston home market is hot right now. There are great buying opportunities on Mount Pleasant homes, West Ashley homes, on the Charleston Peninsula homes, Johns Island homes, look on the low country MLS. All the CTAR members know this but getting the message to your clients is crucial to your success.
Chances are they will buy a home in the next 6 months to a year if they are considering it now. The issue is how much will they pay. Talk to your clients. Educate them on the cost of waiting. If you need additional information or full size copies of these charts feel free to contact me directly <ahref=”mailto:eddie@Coastlendmortgage.com”>eddie@Coastlendmortgage.com , 843-388-5763