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The summer season is here!
With Memorial Day now past and our veterans honored (hopefully not forgotten), we move on to the business of financing the spring and summer sales. By most accounts, things look good for housing and mortgage financing.
The economy continues to grow, albeit at a slightly slower pace than we wanted and expected. With this growth, the Fed is once again talking about raising rates in June. So far, any such raises have not had any drastic, negative impact on mortgage rates.
Rates remain relatively low, home values have recovered to pre-2008 levels, and refinances are once again in play as homeowners take some cash to cover other debts and/or reduce monthly payments.
The fly in the ointment remains the availability of affordable housing. With home values increasing and more people refinancing, the supply of homes across the board has diminished.
New Millennial buyers are entering the market at a higher price point than prior, first-time buyers. As a result, many are purchasing homes in the $400,000 to $500,000 range, leaving fewer homes for traditional move-up buyers.
With fewer mid-range homes available and more refinancing of existing homes, many of those who would normally move up, and offer their lower priced homes for sale, are now staying put.
That leaves too few homes available for the first-time, low-to-moderate-income home buyers, creating a gap in the natural order of the housing chain. A gap that needs to be addressed.
There are still plenty of mortgage financing opportunities out there. ARM loans are making a comeback, along with cash-out refi’s, and home equity loans. Many pockets of opportunity exist in the move-up and first-time buyers’ market. You just need to know where to look and have the products, pricing, and services to meet the needs.
It may not necessarily be easy picking, but with the right planting, and cultivation through the summer months, you can still harvest a bumper mortgage crop come the fall.
Hope you had a great Memorial Day weekend. Please remember to honor our vets all year long.
Happy Summer!
