2022 Interest Rates on the Rise: The Big Topic in Albuquerque’s Real Estate Market

2022 Interest Rates on the Rise: The Big Topic in Albuquerque’s Real Estate Market

(Transcript Snippet): “Tracy:

Lots of new things to talk about lots of information about the home market and buyers, sellers, interest rates. Yeah. Equity,

Tego:

You know, anybody that’s kind of paying attention to the news or what’s going on around Albuquerque. I think most people understand that the, the housing market is very tight right now to say the least and there’s, you know, very few homes on the market, but there’s a few headlines Tracy, that jumped out this week that we wanted to talk about. And I, I think the big one that we’re all chatting about is interest rates.

Tracy:

Well, we absolutely are chatting about interest rates. And so one of the things are we gonna go right into it? Yeah, no go right to it. So interest rates in 2022, we know that already interest rates have risen a quarter to a half a point just in the last couple of weeks. And, you know, we, we hear this information regularly, that rates will probably be by at 4%, by the end of 2022. Well, you know, that’s such a a narrow headline, right? Right. We know right now for some clients and buyers, that interest rates are above 4%. We’re when they say should be up to 4%, that’s for somebody with a, a high credit score, good debt to income, money down, they’re picking a loan program that probably has a 20% down on it. It’s for primary residents, not investment property. So it’s, it’s sort of like if a client is coming to us and they’re not a seven 40 credit or score or above they’re below that or their, their debt to income is not in the ideal range, they’re not going to even get four. Yeah, right. Right now today.

Tego:

And, and, and I think what brings us up Tracy, is we talk about interest rates on the show all the time. And we talk about what the, the, when we’re talk, obviously, mortgage interest rates when we’re talking about this, right. Is in, and, and we’re talking about what the, you know, Fanny Freddie FHA, you know, conventional loans, you know, kind of the, the, the survey, if, you know, you’re a good buyer with good credit scores, good job. And 20% down. And, and so we not too

Tracy:

Much credit on your open line.

Tego:

Yeah. And so we, you know, we say, well, you know, interest rates went from three to three and a half to 3 75. Now we are seeing four, even because just to, well, Friday it’s Friday when we’re recording this today, a mortgage rate went up quite a bit, actually.

Tracy:

Right. They did. And so the, the, this week’s rating of what, where interest rates went to is 3.8 5 8, 3 0.86 across the country. Mm-Hmm <affirmative>. So when, when we look at that historically for the last year, I know that’s a huge, not historical, but one year back we’re 1% above where we were mm-hmm <affirmative>. And for a lot of home buyers, 1% makes a big difference. It makes a huge difference for some in what they can afford, what home price they can afford, what monthly payment they can afford. And so it has shifted historically still.

Tego:

Great. Well, and we’ve talked about this before in, in the inverse, in is that 1% of mortgage interest equals about 10% in home price, you know, when you, when you equal it out between payment. Right. Right. So, so now, you know, to a certain extent home prices, not only cost more because prices have gone up, they cost more to finance now than a year ago, about 10% more on a payment standpoint or cost of the house standpoint. Yeah. Right.