Rate Hike Again?
Rate Hike Again?
The Fed raised its policy rate by 0.25 percentage points in September, and CME FedWatch now shows traders pricing in roughly a 70% chance of another increase in October.
Even it doesn’t necessarily mean the mortgage rate will rise again in Oct, but it shows a trend of where the rate is going.
As we talk with buyers, here are three things worth keeping in mind:
1️⃣ Focus on negotiating seller concessions.
A credit may make a bigger difference to a buyer’s near-term budget than a price reduction.
In the right scenario, a temporary buydown combined with permanent buydown could bring the first-year payment rate into the 3-4% range.
Here is the myth that a lot of realtors may have missed.
The seller concession limits vary by loan program, occupancy and down payment: they can reach 6% or 9% sometimes.
2️⃣ Pay attention to buyer groups whose plans are driven by more than rates.
A high-net-worth buyer may prioritize finding the right property.
A first-time buyer may have access to assistance that changes the upfront math.
For a self-employed buyer, finding a loan that accurately reflects their income may matter more than waiting for a particular rate. The useful question is what would make this buyer comfortable moving forward.
3️⃣ Keep helping after the contract is signed.
A strong network can help clients manage the costs of ownership.
Recently, a client received a homeowners insurance quote above $5,000 a year. Another quote came in around $1,600—a difference of roughly $283 a month, subject to comparing the coverage.
Sharing a trusted contactor or encouraging a second quote can be valuable long after the offer is accepted.
The rate gets the headline, but the buyer experiences the full cost of owning the home.
Looking at that complete picture is where we can offer the most useful guidance.
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