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Way Under
The Nation’s real estate market is significantly under-supplied.According to the most recent research from Freddie Mac, the United States has a housing supply deficit of 3.8 million units.The available inventory today is lower than it has ever been in the last 40 years and is 3.5x lower than the peak of 2008.The reason why available inventory is so low, is the low amount of new home starts that have occurred over the last 15 years.Builders have faced many obstacles trying to keep up with housing demand including supply chain issues, labor supply, land availability, water availability, and stricter approval processes.Fewer new homes were built in the decade ending 2018 than any other decade since the 1960’s.The reality is, the obstacles builders face are unlikely to change significantly in the foreseeable future.Low inventory is likely to persist.An under-supplied market is a key reason leading economists do not expect home prices to crash even while the market cools off.
Buy Before 5
30-year mortgage rates just exceeded 4% for the first time in three years according to Freddie Mac.
We have new advice for anyone considering a home purchase in the next couple of years.
Buy before 5. This means buy before rates go to 5%.
Even though rates have been ticking up over the last several weeks, we believe that in a few years we will look back on this time and realize what a tremendous opportunity it was to have a mortgage under 5%.
So, don’t be discouraged by recent uptick in rates. Instead, feel great that you were able to buy before rates hit 5%.
14 Times
For the 14th time this year, 30-year mortgage rates set a record and hit an all-time low.
Based on data just released by Freddie Mac, rates are now at 2.71%. Their weekly survey of the 30-year mortgage rate dates back to 1971.
Just one year ago rates were at 3.68%.
So, what does this mean for buyers?
Based on a $400,000 loan, current rates result in a monthly payment that would be $212 less than one year ago.
