Borrowing money for half of inflation rate is crazy

[Marcus Auerbach]

Rates are going up quickly now and the FED has not even started taking the step they have announced for this year to combat inflation. The fact that you can borrow money for half of inflation seems upside down: the lenders are literally loosing money doing so.

I just pulled forward financing on a project that is not completed yet; we normally wait until the work is done to maximize appraisal. But I'd rather lock in at a lower rate. The official forcasts from Freedie and Fannie still indicate 3.7% by the end of the year. I highly dount that! I would not be surprised if we see rates going into the 4-5% range quickly.

As I broker I have not seen rising rates slowing down buyers, just to the contrary: everyone wants to buy before rates are higher and rather pay more. The competitiveness we see in the market is nuts (for a market like Milwaukee in January!!) - I have written several offers in the last weeks 50k plus over asking without insoections and that was not enough! This will be an interesting year!

[Bob E.]

We just closed a cash out refi on a small apartment building last week.  I feel like I barely made it over the fish line in time.