Buy Now, Refinance Later: Smart Moves for Today's Market | Real Estate Market Update w/ Martin Perdomo

Mortgage rates have fallen to 6.35%, down from over 7% last fall, and homebuyers are responding. Purchase applications are up for the fourth consecutive week, and property touring activity has surged 14% from last month. This renewed interest suggests a market beginning to thaw, potentially creating a window of opportunity for prepared buyers in early 2025.

The current landscape offers a strategic advantage for buyers - prices have dipped 2.5% year-over-year to a median of $367,500, and competition remains softer compared to previous years. The "buy now, refinance later" approach could be particularly advantageous, allowing buyers to secure property at today's more negotiable prices with the option to refinance when rates potentially decline further. As summer approaches, market activity is expected to accelerate significantly, potentially driving prices higher once again.

A concerning countertrend demands attention: mortgage delinquencies in government-backed loans have surpassed pre-pandemic levels. FHA loan delinquencies have risen to 11.03% and VA delinquencies to 4.7%, while conventional loans remain stable at 2.62%. This widening gap highlights growing financial stress among lower-income Americans and raises critical questions about sustainable homeownership accessibility. For investors and property managers, this trend could impact tenant stability and warrants close monitoring in the months ahead.

Stay ahead of these shifting market dynamics and learn how they could impact your next real estate move. Subscribe now for weekly updates and visit WealthyAF.ai for exclusive insights, strategies and tools to navigate today's complex housing landscape with confidence.

Chapters

• 0:00 Market Update Introduction
• 0:21 Improving Home Buyer Demand
• 1:14 Window of Opportunity for Buyers
• 3:17 Rising Mortgage Delinquencies Concerns
• 5:17 Housing Affordability Solutions
• 5:48 Closing Remarks and Call to Action

Transcript

Speaker 1: 0:00

Welcome back to this week's real estate market update, where we cut through the noise and focus on the numbers that really matter in today's housing and investment landscape. Whether you're a seasoned investor, a first-time buyer or someone just curious about market trends, we've got the insights you need to stay ahead. Let's jump into the latest updates. We start with some good news. Early stage home buyer demand is improving as mortgage rates fall slightly. According to Redfin, mortgage purchase applications increased by 1% over the past week, making the fourth straight week of growth. The average 30-year fixed mortgage rate has dipped to 6.35%, down from the peak of over 7% last fall. While homebuyers' competition remains softer compared to previous years, the easing of mortgage rates has brought more buyers back into the market. Redfin reports that touring activity is up 14% to last month, signaling that prospective buyers are beginning to feel more confident about their home searches as rates decline. However, while rates have improved slightly, affordability remains a key challenge, with prices still high in many markets. Home prices are down 2.5% compared to a year ago, with the median home price now sitting at $367,500. The inventory of homes for sales continue to be constrained, falling 17% year over year. For sellers, this may mean slower activity in some regions. For buyers, there's growing opportunity with lower rates and potential more negotiable price points. If you've been waiting for the right moment to buy, this could be the window of opportunity, as 2025 begins to show early signs of demand recovery. If you're a buyer, I think this is a great opportunity, even though the rates are a little bit higher. However, I think that later in 2025, this summer, we are going to see the market is going to heat up and, I believe, in the years to come, real estate is going to come back hard and strong and it's going to come. The demand is going to go up again and prices are going to continue to climb as rates decrease. So if you're in the market, I would definitely advise. If you're in a position, to go and take advantage of the lower prices today. As rates will change, you can refinance later. My financial advice is what I would do if I were in the market for a house. Quick reminder if you want to stay up to date on how these shifts in the market could impact your next move, make sure to log into Wealthy AF. At wealthyafai, we're constantly updating our members with the latest news, tips and strategies to navigate the real estate landscape. Don't miss out. Sign up now.

Speaker 1: 3:17

Next, a more concerning trend Rising mortgage delinquencies amongst borrowers with government-backed loans, particularly those in the FHA and VA programs. According to recent data from the Mortgage Bankers Association, the delinquency rate for FHA loans climbed to 11.03% at the end of last year, while VA loan delinquencies reached 4.7%. These numbers have now surpassed pre-pandemic levels, experts sounding the alarm that these growing delinquencies may be a signal of financial stress among lower-income Americans. Fha and VA loans are popular amongst borrowers with lower credit scores and smaller down payments, and with interest rates remaining high, many of those borrowers are facing increased financial pressures. While conventional mortgage delinquencies remain low at just 2.62%, the gap between government-backed and conventional loans is widening. Inflationary pressures, high home prices and persistent interest rate increases have disproportionately impacted lower-income borrowers, leading to a spike in late payments and missed mortgage payments. Knightley from ING warned that this is just the beginning. As inflationary remains above the federal reserve's target and borrowing costs continue to rise, the risk of higher delinquencies across the board could grow. For investors and property managers, this is a trend to watch closely. As delinquency increase, tenant turnover puts financial strains for borrowers in the housing market Something definitely to watch out for.

Speaker 1: 5:17

What's the solution to this problem right? How do we, as a country, help the poor, the poor, the lower class and the poorer people get into home ownership without setting them up for failure? That's a big solve that the big brains like Elon Musk and this current administration have to figure out. What do you think is the solution? How do we solve for this? That's a wrap for this week's Real Estate Market Update. Remember, staying informed gives you the edge, whether you're buying, selling or investing. Make sure to subscribe to stay up to date in the latest real estate trends. We'll see you next week with more data-driven insights to help you navigate this real estate market.