Guest post from Jim Hutelmyer at PRMI | Primary Residential Mortgage, Inc.
I was at a real estate mastermind last night and the main speaker who is one of the prominent real estate agents in the Arizona market told the room we are in “confused market”. Prices are going up, rates are down, are we in a bubble? Is what is happening good or bad?
I can tell you from the financing side this is a much different price increase than we remember from the early 2000’s. Second mortgages aren’t being handed out, people with subpar credit aren’t qualifying for loans, and adjustable rate mortgages aren’t being written in droves. People who should be able to buy a house are able to buy a house. Take that in as it is important to understand the market.
The media tends to spin the narrative that people can’t get mortgages and that is just not true. The reality is that people who shouldn’t have a mortgage can’t get a mortgage showing that perhaps we have learned from our transgressions.
Today those who can afford a mortgage can get one and as a lender I encourage people who believe they can afford a home to talk to myself or their lender. At PRMI we provide free and “factual” information to people on whether or not they can buy so that they can operate from a stance of fact, not speculation.
The thing that is behind today’s market is the “exit strategy” so to speak is the rates. Rates continue to hover near record lows and the beauty of borrowing money at low rates is that you have a house that in the worst possible scenario can produce cash flow as a rental. When inflation catches up and rates start heading back up into the 5’s the value of homes financed with today’s rates will only increase.
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