Trying to Make Sense Out of Inflation Information

The Mortgage Voice
The Mortgage Voice
Trying to Make Sense Out of Inflation Information

For those following economic data and trying to make decisions based on the information available in the marketplace regarding inflation in terms of housing prices and mortgage rates, it seems that none of it makes any sense. A year ago, interest rates on a 30-year fixed rate mortgage were three to three and a half percent, and currently, they have jumped to six and a half percent for that same type of mortgage.

Also a year ago, inflation was between nine and nine and a half percent, whereas today has come down to six and a half percent. To put into perspective how inflation has affected everyday products and things cost considerably more today than last year, eggs are up 70% from $3.50 to $5.70 for a dozen. Other staples like butter and margarine, cereals, bakery products, and pet food have risen as well. Once affordable starter homes are now more expensive and being built further away from work hubs, with more people vying for fewer homes.

The most recent inflation data revealed that inflation increased by roughly six and a half percent as measured by the Consumer Price Index, which is not quite as good as economists had predicted. This indicates that prices have increased by six and a half percent over the past year. Inflation is stickier than previously believed, according to several FED Governors on the committee that chooses whether or not to hike interest rates, after predicting two weeks prior that it would decrease sharply, hitting two percent inflation overnight. When the economic forecast states one position, then pivots the following week to something completely different, consumers are unsure what to do next in case the pendulum swings back again. How can homebuyers navigate such conflicting information? Talking to a mortgage professional will guide buyers through the most important aspects of getting any loan – focusing on monthly payments, whether they are affordable, and if all requirements are met to qualify for that particular mortgage. This week, Jeff’s guests include:

– Charles Giscombe (Malibu Funding Las Vegas) states the market has NOT crashed, homes are selling, and values are holding.

– Jamal Ransford (Equity Prime Mortgage) introduces a down payment assistance program that is a forgivable grant after six months of payments.

– Julie Peisner (Sotheby’s International) discusses the luxury market and the market under $2 million.