Today’s homebuyer has a particularly challenging journey. As home prices remain high, mortgage rates are also rising at an alarming pace. Meanwhile, inflation is at a record high and fears of recession loom in news headlines.
What can you do to calm the nerves of prospective buyers?
You can’t control mortgage rates, but you can help put them in the proper context and make them feel more confident about the road ahead. Here are four points to discuss.
Timing Is Everything
Rate hikes by the Federal Reserve have driven mortgage rates to a 16-year high as they try to combat inflation. However, this same time period saw abnormally low rates compared to historical trends, so there’s no telling whether recent rate hikes are a short-term trend or a return to long-term norms.
It might be helpful to provide buyers with this context and remind them that refinancing is a potential option if rates improve later on.
Affordability Is Relative
While mortgage rates remain at historic lows, the fact that they’ve risen so sharply can’t be ignored. Buyers have seen their purchasing power significantly reduced practically overnight, and many have been priced out of the market entirely.
But there’s a silver lining here that could help bring some relief to buyers — decreased demand is driving prices down and could help boost inventory.
Buyers Are Gaining Leverage
Remember when buyers could expect a bidding war with every offer they made?
With less competition, buyers have more power; they have more time to weigh their options and can negotiate more favorable deals.
Professional Guidance Is Imperative
Driving down sales prices is only half of the equation. Buyers also need the best possible mortgage rate to ensure long-term affordability. Emphasize the importance of working with a trusted mortgage professional and provide a referral to help them get started.
For more ways to help your clients and elevate your service, reach out today.