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's a proven fact.

Business Insider 

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'

We know you have options- let's chat if you want more details.

* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.

This site uses cookies to process your loan application and other features. You may elect not to accept cookies which will keep you from submitting a loan application. By your clicked consent/acceptance you acknowledge and allow the use of cookies. By clicking I Accept you acknowledge you have read and understand NW Funding Group- Bill Black's Privacy Policy.