Mortgage Rates: The Big Buzz in Albuquerque’s Real Estate Market
(Transcript Snippet): “Tego:
Tracy, let’s start off with mortgage rates, cuz that’s really kind of the big buzz this week. When we, when we, when we’re talking about real estate and housing everywhere, everybody’s talking about mortgage rates. So
Tracy:
The last two, two weeks, or just really since the first of the year, right? We’ve been watching the stock market, we’ve been watching interest rates. We’ve been checking out all the stats and what’s going on. Interest rates have jumped up and you know, the, the basis points that relate to it, don’t relate to it too much. Right? Tigo. Well,
Tego:
When you, when you look at you know, what the feds doing, everybody says, well, the fed is raising rates. So that’s gonna raise, raise mortgage rates. That that’s true, but there’s not a direct correlation. It’s an indirect correlation, but you know that, and, and that’s just, it, you know, the, the fed hasn’t raised the, the prime rate yet, but yet mortgage rates have gone up in, in anticipation of, of a higher cost of money. The fed saying
Tracy:
That they’re going to be increasing the rates. Yeah. Perhaps several times during the year has really caused a lot of, a lot of movement in a lot of different markets.
Tego:
Yeah, no, for, for sure. And so in, in the mortgage world, we’re, we’re seeing about 3.75 mortgage interest rates, which, you know, if you go back I think we hit a low in 20, 21. That’s one of the records for the year at two six. Don’t give it
Tracy:
Away yet. Oh, okay. Oh,
Tego:
Okay. Go ahead. 2 65 I think was, you know, people, people were getting rates, you know, EV I heard people getting rates even lower than that.
Tracy:
So that was January of 21. Yeah. When we had a record of rates, we’re talking 30 year fixed rate mortgages because obviously a 15 year or a 20 year, we’re going to be even lower than that. So what we consider most borrowers do a 30 year loan.
Tego:
Yeah. So, well, especially with the cost you know, if you, if, if you do a whole cost benefit of analysis of, you know getting a higher, a higher rate and spreading it out or getting a little bit lower rate and condensing it, you know, there’s a lot of different thinking on that, but just to give people an idea, I mean, rates are somewhere around three and a half to 3.75, and that’s, you know, dependent on the type of program. If it’s FHA, if it’s conventional, you’re obviously the quality of your credit makes a big difference. Totally. but you know, it, it, it’s so funny that we’re, we’re talking about three and a half, 3.7, five as high mortgage rates.
Tracy:
So when we, we were just talking about 15 year rates, so 15 year rates right now yeah. Are lower. Right. They’re somewhere probably just around three,
Tego:
About a half point, maybe three quarters, a point, you know, again, it really depends, but yeah. So, so, you know, everybody needs to do that analysis when they’re, when they’re looking to buy or refinance on a mortgage and, and, you know, work with a, a, a local lender, that’s an expert and, and can really guide you through, you know, what the best program is for you. So
Tracy:
Tego, I, I had this interesting conversation this week and it was, you know, interest rates were up about half a point for somebody who was looking to be a buyer. Yeah. Right. And they were, we were doing the math on what was that in real numbers based on their purchase price. And it, you know, in real numbers, it was about $70 more a month in a mortgage for them. What was the price point on? It was around three, I believe. Okay. So don’t quote me, but it was somewhere I know that I know that their increase because of the mortgage rate increase was about $70 a month. So we were talking about it. And I, I have to remember having been a real estate professional for 19 plus years now that I keep going, oh my gosh, it’s still so low. Everybody shouldn’t freak out that we’re at almost four and we’re probably gonna be at four before long.
Tracy:
Right. Yeah. Yeah. And, and so I was telling story about Jane way. Who’s on our team and she’s my sister. And back in the early eighties, she camped overnight in Minnesota. I believe it was even winter in Minnesota. Interest rates at the time were around 18% as I recall. And she camped overnight for a 12 first time home buyer interest rate to help first time home buyers get into homes. And luckily she got there early enough and she was one of those that was able to take advantage of 12%. So when we’re talking 4%, I always have to put it in perspective. And remember not, everybody’s been through those 12 to 18% years in
Tego:
Exactly. I mean, you think about the, the, you know, the millennial generation that, that grew up during the housing bubble that grew up, you know, obviously, you know, came of, you know, the millennium. I mean, obviously that’s why they’re called millennials, but but that generation, I mean, that’s all they’ve seen. They’ve always seen sub 5% mortgage rates. Right. So,
Tracy:
So 19 years ago when I got into real estate we were in the seven and a half percent range for quite a few years. Yeah. My first many years in real estate. Yeah. Yeah.
Tego:
Yeah. And, and so, you know, the whole idea, the whole, the whole thing about mortgage rates is, you know, all indications are that they’re going continue to go up this year. There may be a pull back, I’ve follow some economists that, that think maybe they’ll, they’ll pull back. Who knows, you know, but it’s a whole idea that what I just wanna say is, you know, mortgage rates and cost of homes versus renting and cost of renting, you just have to do the math and see what works better for you.
Tracy:
Absolutely. So doing the math and knowing what you’re comfortable with and, and how interest rate fluctuations can help or hurt you and knowing when to lock interest rates. Right. That’s one of the best things about working with a great local lender, right? Cuz they look at these rates every morning and they might, yeah. If you’re gonna be under contract, you typically don’t lock your interest rate. Like the day you find your perfect house. Right. Right. You usually are, are talking to your lender and they’re watching rates because rates can fluctuate inter day. Right. Oh for sure. So they’ll call you and say, Hey, interest rates just dropped an eighth of a point you might wanna consider locking today. And, and so having a great local lender who’s working on that for you is pretty important.