In the words of former Vice President Dan Quayle, “We are ready for any unforeseen event that may or may not occur.” Around the world, soaring borrowing costs are squeezing homebuyers and property owners alike. So, what does the public see in terms of headlines and the housing market? There was billionaire CEO of private equity company Starwood Capital Group, Barry Sternlicht, warning that the housing market is headed for a major crash. Moody’s Chief Economist Mark Zandi is more optimistic, saying that house prices will soon undergo a ‘correction, but not a ‘crash.’ Almost one-third of homes sold in July were paid for entirely with cash. Wealthy U.S. homebuyers are charging in with all-cash purchases even as the broader housing market is slowed by rising mortgage rates. One thing is certain for those financing or looking to finance their real estate. Households with loans are tightening their belts, while rising mortgage payments discourage would-be buyers from entering the market, dragging on property prices and development. And more sellers accepted offers below their listing prices last month than over the course of the entire pandemic. That comes as investors display more nervousness about the Fed decision later in the week. The central bank is expected to raise interest rates by another three-quarters of a point, though there are calls for a 100-basis point move, after the August CPI figure showed that inflation has not peaked yet. (Today’s podcast is available here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services in the mortgage industry and in banking. Todays has interview with Quontic’s Joseph Allen on the Community Development Financial Institutions Program and how those loans can be a resource for underserved people and minorities that are struggling to buy a home right now.)

Published On: September 19, 2022 / Categories: Mortgage News /