This is a challenging time to be a mortgage broker.
Thanks to the banking meltdown, there are fewer lenders, and those who weathered the storm are skittish and unreasonably conservative, making it more difficult for hard-working people with good credit to get a home loan.
Rates are higher, so the same house for the same price will cost your client more. Buyers will have to pay more now than they did two years ago – to get less.
Also, thanks to the low inventory, fewer deals are happening, and most homeowners are staying put because they can’t validate moving to something less that costs more.
But this is not the case in the luxury market segment over $5Million. These buyers don’t care about mortgage rates. These buyers are looking to take advantage of the perceived weakness created by this high-interest rate environment. They are circumventing the mortgage process and are paying all cash.
65% of all home purchases in NYC last quarter were done without a mortgage—a staggering number. Every week there’s a record-breaking sale, and almost all of these deals are done without a mortgage.
Consumer confidence is high, and as we know, much like the financial markets, the real estate market is driven by consumer confidence. If the DOW had risen yesterday, it would have been the index’s longest win streak since 1897.
While there is minimal liquidity in the mortgage market for starter homes, many wealthy buyers pay cash for trophy homes with dry powder.
Side Bar:
If anyone can explain to me why Meta continues to think that there will be a market for people buying real estate in a “Metaverse,” please shoot me an email. Reality Labs (Zuckerberg’s Metaverse company) continues to hemorrhage money. The company lost $3.7Bn last quarter in addition to the $13.7Bn they lost last year. Wouldn’t it be great if the company took that money and invested it in designing affordable and sustainable housing for real people in the real world?
Let’s do this.
– Shaun