Mortgage Rates Take a Deep Dive!

[Jason Wray]

This week the FED outshined expectations and instead of a .25 basis point reduction they cut it by .50% which is huge for home buyers! We are off to the races and it’s now or never to find a home and put in an offer. If you have been waiting to refinance your home to pull out cash because of a 2%/3%/4% rate you will be happy with the rates enough to act now. Do not be one of the people who wait and hope that rates will continue to fall into next year. We have 3 months left of 2024 which means now that the rates have spiked down hundreds of thousands of people will come to the market with an offer.

A large number of new home buyers and investors means multiple bids and offers plus more coming in over asking price. This is going to mean more homes closing faster and more closing means more comparable sales to trigger a rise in homes prices. We are moving back into a "Seller's market" which is bad for buyers. Great for realtors who should be calling all of their old leads with the good news of todays Fed rate cut.

As rates continue to fall this is the time to ask for "Seller Credits" and think about using that credit towards buying the rate down. Rates will be dramatically lower but a rate buy down just means lower payments and higher cash flow each month. Buyers if you want an extra advantage over other buyers call your favorite Mortgage Banker and ask for a "Fully Underwritten" approval not just a Pre-approval. The difference is the bank underwrites your file up front and offers an ELA or "Express Loan Approval" which is a guarantee to close in 15 days or less. That gives the agent a stronger offer and you have a greater chance of winning the home with a loan commitment versus a Pre-approval letter.

As of this morning rates are down on all programs for Primary homes, Second/Vacation homes, and investment homes. DSCR has also taken a good hair cut on rates today and on lower LTV's they are even better.