We’re a wealthy country with many high earners, and because of that we can afford to take the easy way out when applying for a mortgage. No one likes to submit tax returns and bank statements to multiple lenders and applicants are happy when the first lender we apply to gives us a mortgage.
Interestingly, people with higher incomes and who are older frequently apply to just one lender and, therefore, are often the ones paying the most in fees in mortgage financing. I get it and I have done it myself – just make it happen and show me where to sign. Comparing mortgage rates to a variety of lenders will make most people’s heads explode and they don’t even think about negotiating any of this. Working with just one mortgage lender will likely end up leaving money on the table, especially over the long term.
On Sept. 10, the national average crossed over the 7% mark. Major lenders that week generally were offering interest rates between 6.75% and 7.15%, depending on points and loan specifics.
Herein is where dedicated mortgage shoppers come out on top. They take the time to calculate if paying points, basically fees paid upfront to buy down your interest rate and lower your monthly payment, makes sense for your long-term financial plan, assuming you have one. Likewise, asking for a complete breakdown of fees and comparing rates between lenders is well worth the effort. Even a fraction of a percent rate can add up over a period of 30 years.
Inflation is going up and dragging interest along with it. The latest data released on Sept. 11 shows the U.S. annual inflation rate held steady at 3.4%, which is well above the government’s 2% target. Because of this, the financial markets predicted a better than 80% chance the Federal Reserve will hike interest rates, and that happened last week.
We’re now going to look at the August sales statistics for Manatee County, published by the Realtor Association of Sarasota and Manatee, but first let’s see how August sales looked nationally. Sales of existing homes fell 2% in August over the previous month, the lowest in more than a year. The national existing home price in August rose 1.6% from a year earlier to $429,100 per the National Association of Realtors.
Now for Manatee County. Single-family homes closed 5.7% more properties this August compared to last. The median sale price was $495,000, up 5.9%, and the average sale price was $663,878, down 0.3%. Median time to contract was down 15.1%, and the month’s supply of available properties was 3.9 months, compared to 4.6 months last year.
Condos closed 20.5% more properties this August compared to last August. The median sale price was $307,000, up 5.4%, and the average sale price was $372,591, up 5%. The median time to contract was down 7.7%, and the month’s supply of available properties was 4.9 months compared to 6.4 months last year.
In a nutshell, overall sales and pending sales are strengthening, inventory is tightening, and homes are moving faster.
The housing market is well into its fourth year of stagnant sales. With mortgage rates higher and possibly headed higher still, it does not look good for a turnaround. That’s even more reason to shop around for the best mortgage deal you can get if you do decide to go forward and buy.
Grandmothers are usually right; they shopped around for the best price on everything from steak to shoes, and it worked until we all got too rich.
