Act Now or Pay Later: Experts Predict a 20% Surge to $500,000 in Average US Home Prices if Fed Cuts Rates Prematurely!

1% drop= 10% payment drop= 10% more approval

It's not "Rocket Science

~~~~~~~~ KEEP IT SIMPLE~~~~~~~~~~

A 1% drop in rates is a 10% drop in payment.

A 10% drop in payment is a 10% higher pre-approval letter.

The higher the average buyer can pay the higher offers tend to be....it's a proven fact.

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The competition is fierce today with rates at 7.5% what happens when they go to 6.5%?

Here's an example of why home prices will spike when rates drop as many industry Professionals understand.

The home is listed today at $500K and like most homes in this price point, has multiple offers with many first-time homebuyers pushing their offer to the top of their approval price. If my approval with 5% down is a $500K home they are usually looking at $525K thinking they may get a "deal".

Let's assume they offer full price but still lose out on the home... back to shopping they go and then on to the next house at $500K they go $510K and that's their MAX for approval- guess what? They don't get it as well. We see this daily with homes at that price point.

Fast forward when rates drop 1% and this same buyer now has a $550K approval letter and has struck out on the last 2 houses they fell in love with and found their "perfect" home listed at $500K- how bad do they want the house? The seller's agent says to come in with the highest and best offer!

Who's going to $525K or who's going to the top of their approval at $550K?

In my experience, the payment is usually the key factor in the offer and if a payment is $XX amount at $500K and is the same at $550K then they'll go to $550K.

This is why I feel we could see the quickest price increase in history if rates suddenly drop overnight.

This is why it's worth looking into buying today or paying more later.

The 3-2-1 buydown puts a buyer in the 4% range in year one....I priced one yesterday on a $600K home and it was about$20K from the seller to contribute and lowered payment over $1,000 or they could have offered $580K and that dropped payment $140.

Ironically, I also learned his lender did not offer these types of buydowns and instead offered him a 5.99% on FHA with $27,000 in points!!!!

Anything to do with Real Estate- We Gotchu'

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