One of our Senior Real Estate Agents Matthew Giangregorio recently met with Chris Devin of CrossCountry Mortgage for an interview on his popular podcast and web series, RE Talk Boston. They had some laughs, talked real estate and give you some solid information on interest rates and just how they’re affecting the health of the Boston Real Estate market. Read some key takeaways from Matt’s interview, and be sure to watch the full video at the end.
Matt’s thoughts on the “Softening” of the Market
Rising interest rates are top of mind for most buyers nowadays. As rates are increasing, we are inevitably seeing a parallel increase in rate-sensitivity among buyers. In his interview, Matt explains that the rate hikes we’re seeing are actually indicative of the market getting back to a healthy and/or normal state. “We’re seeing the market begin to stabilize, become a bit more healthy, and not so much a sellers market. I think the misconception is that the market is softening because there’s not 10 offers on a property. That’s not normal.”
He goes on to explain, “Rates since 1971 on a 30 year fixed residential mortgage, up until 2008, were between 6 and 18%. Right now we’re at 4.5%. I think people backing out of the market because of that(rate increase), is not a good idea.”
Are mortgage rates impacted by the Fed interest rate?
Another common misbelief regarding mortgage interest rates is that they are drastically impacted by the Fed interest rates. Matt debunks this by stating, “Mortgage interest rates are not tied to fed interest rate. Mortgage rates are not at the 52 week high right now. The 52 week high was 5%, we’re at 4.5 today, even though Fed interest rates were raised last month. So, there’s not a direct correlation. Another thing is, rates are probably going to go up within the next year or two. So it doesn’t make sense to wait for the rates to go up to buy. If I was in the market to buy, I want to get them in low.”