“Be Here Now” is the catchphrase for the first quarter of 2022. Events all over the world – from what’s happening today with rates, treasuries, and mortgage-backed securities, to the economic uncertainty in China – inform whether buyers will have an issue with housing affordability or a problem finding a house. These things are pertinent to help determine success in getting a home. Rates have gone up and will continue to do so, although not as quickly in the first couple of weeks of the new year. The government stimulus kept rates historically low during the pandemic, and they have remained below average up until the last several weeks as inflation began kicking in. Covid will likely also continue influencing the decisions made by governments for some time yet, with countries around the world intermittently shutting down portions of their economies to protect citizens as the pandemic wears on.

The housing inventory is declining, as January is typically the slowest time of the year in the market. Many people are faced with the decision of buying a house that might not be right for them before rates go up, instead of waiting until more homes are available on the market at a higher rate. Everything is in flux right now, so for the first quarter of the year, patience is key when considering buying a home. When rates rise, housing costs will go down, as sellers can take three to six months to adjust their asking prices to entice buyers. If people aren’t buying, inventory increases, driving prices down as well. The Fed is ending tapering between March and June and raising the fund rates to their member banks in March, who will then pass that higher rate on to clients. The Fed will also be selling off assets, and all of these things combined should help to lower inflation within the next three to four months, freeing up more money for consumers to put towards a mortgage.

The “Be Here Now” philosophy means prospective buyers should focus on being a little more patient, waiting for the right property to come to market, and seeking homes that are in their price range to avoid spending half of their monthly income on a mortgage. Jeff’s guests this week:

– Taryll “Big Tex” Robinson from TDR Financial Services talks about smart investing.

– Mikke Pierson of Pierson Business Quote Solutions discusses business coaching.