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Your Guide to the Housing and Mortgage Markets; The Martini Factor (September 26 – October 2, 2022 Economic Update)

September 26, 2022 by Kevin Martini

The Martini Factor is curated by Certified Mortgage Advisor and Raleigh Mortgage Broker Kevin Martini to provide a glimpse of what is likely to impact Raleigh mortgage rates this week.

The top 2 items likely to impact Raleigh mortgage rates this week

RECESSION FEARS

As expected, the Fed increased short-term interest rates last week by 0.75%. Even though the news of an increase in the short term rate was expect, the news that rattled the stock and bond market was Fed Chairman Powell’s firm position to continue hiking rates aggressively until inflation comes down. This certainly shouldn’t have been market-moving news given that this message is being screamed from the rooftops over the past several months. However, investors apparently got spooked that continued aggressive rate hikes are likely to trigger a massive recession, with perhaps unforeseen dire consequences for the economy.

SPECIAL REPORT: The Fed Rate Hike

PCE INFLATION NUMBERS THIS THURSDAY AND FRIDAY

The Fed’s favorite measure of inflation is PCE (Price Consumption Expenditures). The revised Q2 numbers are scheduled for release this Thursday (9/29/2022), and last month’s numbers are scheduled for release this Friday (9/30/2022). Either of these reports could trigger a market reaction that could negatively impact Raleigh mortgage rates.

Oh by the way…

It is never too early to start to explore your homeownership options and you are not too late either. The first part of the homeownership journey is the loan and then after you have the certainty and being armed with price and cost clarity, the second step is to go find your home. The Martini Mortgage Group offers trusted advice with a frictionless digital mortgage process that provides certainty. To contact Mortgage Strategist with the Martini Mortgage Group simply call: (919) 238-4934.

Things to Consider when Buying a Home

If you are a first-time homebuyer or a repeat homebuyer, there are many things to consider when buying a home. Certified Mortgage Advisor Kevin Martini and Senior Mortgage Strategist Logan Martini curated the Fall 2022 Martini Buyer Guide to simply explain the current real estate and mortgage markets plus vital information about buying a home and the process of getting a mortgage. The Fall 2022 edition of the Martini Buyer Guide has a dozen of informative articles that talk about things one needs to know about the current real estate and mortgage markets.

Your Guide to the Housing and Mortgage Markets; The Martini Factor (September 19 – September 25, 2022 Economic Update)

September 19, 2022 by Kevin Martini

The Martini Factor is curated by Certified Mortgage Advisor and Raleigh Mortgage Broker Kevin Martini to provide a glimpse of what is likely to impact Raleigh mortgage rates this week. This week it is all about the Fed, for the people in the back let me say it again, this week it is ALL ABOUT THE FED!

WHAT’S GOING ON IN THE ECONOMY THIS WEEK AND WHY DOES IT MATTER?

Mortgage bond prices opened sharply lower on Monday, and bond yields have spiked across the board as the market places bets on the Federal Reserve’s interest rate decision, scheduled for this Wednesday. Investors are betting that a 0.75% rate hike will take place, although many, to include the Martini Mortgage Group are betting that the Fed may hike rates by a full 1% in response to recent data showing that inflation has not yet peaked.

It is my opinion, if the Fed increases rate by 0.75% on Wednesday, mortgage rates may actually improve. Now if the Fed increases rates by 1%, mortgage rates may deteriorate.
Raleigh Mortgage Lender Kevin Martini

Most investors are betting the Fed will hike short-term rates by that amount, although some are betting on a full 1% rate hike.

IMPORTANT

Trying to time the market in this environment is a bit like trying to catch a falling knife: the odds are such that you’ll likely get cut deeply however you play it. Be prepared for lots of volatility in the market this week. For questions and live up-to-the-minute updates, contact the Martini Mortgage Group buy calling (919) 238-4934.

Oh by the way…

Things to Consider when Buying a Home

How a Homebuyer can Benefit from a 2-1 Buydown by Logan Martini

September 18, 2022 by Kevin Martini

Just because bidding wars are declining and mortgage rates are jumping higher, it is still competitive out there for homebuyer and home sellers. This unique Raleigh real estate landscape is prompting many homebuyers to re-evaluate their homebuying scenarios. Technically we are in a seller’s real estate market however there are many unique benefits to a homebuyer in this current market, a Martini Mortgage Group 2-1 Buydown is one of them.

What is a 2-1 Buydown

A “2-1 Buydown” is where the seller pay a fee at the closing to reduce the interest rate on your mortgage by 2% in year 1 and 1% in year 2. This results in temporarily lowering your monthly payment and potentially making the home more affordable for you.

Buyer’s Real Estate Market vs. Seller’s Real Estate Market

buyer's market vs. seller's market by raleigh mortgage broker logan martini

A buyer’s real estate market is generally anything more than 6 months and a seller’s real estate market is generally anything less than 6-months.

Housing inventory measures how many months it would take to sell all the houses currently listed for sale, at the current pace of home sales. For example, if there are 3,000 homes currently listed for sale, and an average of 1,000 homes are selling each month, there would be a 3-month housing supply. This is because it would take 3-months to sell all the homes currently listed for sale.
Raleigh Mortgage Broker Logan Martini

Will it become a Buyer’s Real Estate Market Anytime Soon?

Not likely for many reasons. One of the main reason it is not likely that it will become a buyer’s real estate market anytime soon is the lack of inventory and abundance of homebuyer demand. In fact, it may take not just years, it could take a decade for the housing supply to increase enough to meet demand. Sure, inventory has increased recently and this increase has created a unique opportunity for sellers and buyers.

If you’re a seller, you may have to be more competitive with the way you price your home and potentially offer some concessions like paying for the buyer’s closing costs or offering a 2-1 buyydown. If you’re a buyer, you have more inventory to choose from, but don’t expect prices to tumble anytime soon and you have to still be able to act fast.

What are the Benefits of a 2-1 Buydown?

A 2-1 Buydown reduces your interest rate and monthly payment during the first few years of homeownership, making the home more affordable for you. It can also allow you to benefit from owning a home now so you can start to build equity vs. waiting a few more years and continuing to rent. When the seller pays for the 2-1 Buydown, it would have a much greater impact on your monthly payment than asking the seller to reduce the list price of the home. This could be a great negotiating tool because a greater percentage of homes listed for sale in today’s market are seeing price reductions.

best raleigh mortgage broker logan martini 2 1 buydown

What happens when the Interest Rate goes back to Normal?

In year 3 of a 2-1 Buydown, your interest rate would adjust to its normal “note rate.” If market interest rates are the same or higher than they are today, you would just keep the loan and pay the normal payment. However it is being predicted by many economists, market rates may come down again. In that case, you may be able to refinance at the then-current rates. Keep in mind that interest rates are cyclical.

Connect with Logan Martini with the Martini

Let me know if you’d like for me to run some numbers and see if a 2-1 Buydown might make sense in your situation!

Logan Martini

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