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Mid-Year Mortgage Market: Insights from Local Lender,Matt Webster

Watch the full interview here

In a recent conversation, we caught up with local lender, Matt Webster, to get the latest insights on mortgage lending. As someone who’s been in the industry for nearly three decades, Matt provides a seasoned perspective on current trends, interest rates, and the overall market environment.

Interest Rates and Market Behavior

At the start of the year, we discussed the forecast for interest rates, which is always a hot topic in the mortgage business. Back in January, Matt noted that rates had peaked at around 8% in late 2023. Since then, they have decreased slightly to around 7%, though there were fluctuations. As of mid-2024, he reports a more promising development:

“The good news lately is that rates have been coming down… Over the last couple of weeks we’ve seen rates come down to below 7%. Right now they are about 6.875%,” Matt explained.

This reduction in rates, even though slight, is a relief for many borrowers, making the monthly payments a bit more manageable despite rising property prices.

Rising Property Prices and Affordability

While interest rates are a significant factor, Matt emphasizes that the rising prices of real estate also heavily impact monthly mortgage payments. This double whammy of high rates and soaring property values has pushed many to reconsider their borrowing strategies. He mentioned:

“We realize one thing that’s happening in the market is prices keep inching up. And so it has an impact on people’s final payment of what they’ve got to make month in and month out on a mortgage.”

This trend underscores the importance of borrowers planning their finances meticulously, especially with the current volatility in both interest rates and property prices.

Borrowing Trends and Underwriting Challenges

Despite the challenges, the market remains active. Matt observes that people have generally adapted to the higher interest rates:

“People kind of swallowed that pill six to eight months ago when rates really jumped up and people put on the brakes and they realized, okay, this is where we are now, right.”

Creative Financing Solutions

In light of affordability issues, many are turning to creative solutions to make homeownership possible. Matt shared an example of multigenerational households combining resources to purchase property. He mentioned instances where family members provide significant financial gifts to help with down payments:

“We just closed on a property where the grandfather was moving in with them. Grandfather put down the down payment and the grandson is going to make the mortgage payments.”

Such strategies highlight the adaptability of buyers in a challenging market and the importance of family support in achieving homeownership.

Matt Webster’s insights provide a valuable perspective on navigating these challenges, emphasizing the importance of careful planning and creative solutions to achieve homeownership in today’s economic climate.

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