Follow Patrick Linkedin Facebook
Email Patrick Email
Financial
Jan 20, 2016

Interest Rate Hike Creates A Surge In Mortgage Applications

Sponsored Content provided by Patrick Stoy - Mortgage Consultant/Owner, Market Consulting Mortgage

The power of the media to shape public opinion and exert influence on our national economy is something that never ceases to amaze me. When the Federal Open Market Committee voted to increase the funds rate that it uses to sway interest rates by a quarter point last month, I witnessed the effect of this phenomenon firsthand.

To put it simply, it has been extremely busy around here for the past month or so. Many of the calls have originated from people who have been actively shopping for a home. There also has been a large volume of calls from home owners seeking to refinance and lock in a great deal on a new loan while interest rates are still low.

If there’s a long-term side effect associated with wearing a Bluetooth earpiece that is connected to a smartphone, I could be in trouble. That is a bit off-topic, but the point is that the media has created a sense of urgency and people are recognizing that interest rates might not be this low again for many, many years.

The increase in the interest rate, which was the first of its kind in almost a decade, is just one factor that contributed to the recent surge in mortgage applications. Another is the number of homes sold in Wilmington, which has jumped by more than 12 percent since 2014, according to data published by the Wilmington Regional Association of Realtors (WRAR).

The median sale price for homes in greater Wilmington and the surrounding areas also has increased by more than 10 percent year-over-year, if you compare December 2014 to December 2015. This information also comes from a report by WRAR.

What’s happening? Home owners are realizing that the window of opportunity to cash out some equity and refinance at a lower interest rate could be closing. To a lesser extent, the surge in prices and sales also has created more interest among home buyers, as competition has increased and word-of-mouth about the heating up of the real estate market has spread.  

Another development that has spurred an increase in business for the mortgage industry has been the launch of the Fannie Mae HomeReady loan. For borrowers with a credit score above 680, it is a very cost-effective option. The Fannie Mae HomeReady loan allows for up to 97 percent of the purchase price of a home to be financed. It also provides an increased flexibility in terms of where the funds can come from for the down payment and closing costs, with no minimum contribution required from the borrower for one-unit properties.

As one of my Realtor friends is fond of saying when discussing the cyclical nature of the real estate market, “You never know you’re at the bottom until you’re on the way back up.” When prices climb, purchase power deteriorates, and missing out on a window of opportunity like this could create a tremendous sense of frustration.

For a confidential assessment about your purchasing power or a referral to a qualified local Realtor, please contact me at the number below.   

Patrick Stoy (NMLS Numbers 39527 and 39166) has 16 years of mortgage lending experience. Patrick is CEO of Wilmington-based Market Consulting Mortgage, which he started in 2005 with a mission to build lifelong customer relationships by providing real value. To learn more about Marketing Consulting Mortgage, visit www.macmtg.com. Patrick can be reached at [email protected] or (910) 509-7105.
 

Other Posts from Patrick Stoy

Mcm 14jan insight
Ico insights

INSIGHTS

SPONSORS' CONTENT
Billhunter300x300 b&w

Would Don Draper Have A/B Tested? - Going With Your Gut Versus Using The Data

Patrick Stoy - Market Consulting Mortgage
Yasminheadshotwithlogo

It’s Not A Piece Of Cake: Idioms In The English Language

Patrick Stoy - Market Consulting Mortgage
1 shaun olsen 300x300

Marco Marsala: A Cautionary Tale

Patrick Stoy - Market Consulting Mortgage

Trending News

Brewery Proposed For Wilmington's Soda Pop District

Jessica Maurer - Oct 19, 2017

Developers Want To Build 150-room Hotel In Porters Neck

Cece Nunn - Oct 20, 2017

Developers At Downtown Event Describe Projects In The Works

Cece Nunn - Oct 20, 2017

Cape Fear Realtors Announces New CEO

Cece Nunn - Oct 20, 2017

Innovator Oscar Lewis Discusses Business Challenges At Conference

Christina Haley O'Neal - Oct 19, 2017

In The Current Issue

Health Care Heroes: Community Achievement

Finalists in the 2017 Health Care Heroes Community Achievement category: Jana Jones Halls, Olivia Herndon and the Sunrise Kids Program....


Brilliant Sole's VR Toehold

Two years ago, Wilmington entrepreneur and hardware designer Jeff Guard found something lacking when the first consumer virtual reality head...


Health Care Heroes: Physician

Finalists in the 2017 Health Care Heroes Physician category: Joanne “Anne” Allen, Catherine Daum and Scott Visser....

Book On Business

The 2017 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

Major Developments
WilmingtonBiz Expo - Key Note Lunch with Keynote Lunch with Chip Mahan - 2016