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The Vicious Cycle of Rising Rates and Getting a Mortgage

The Vicious Cycle of Rising Rates and Getting a Mortgage

It seems like only yesterday that mortgages were at historically low rates with fewer hurdles to qualify versus the current state of affairs.  That's because in terms of how quickly and significantly interest rates have risen, mortgage rates are now at 7% in response to the Federal Reserve raising rates in an effort to stem inflation, and showing no signs of easing any time soon, the mortgage and housing industries have come to a slowdown the likes of which haven't been seen for over a decade.  as mentioned in the title of this blog post, the "vicious cycle" we refer to is that as mortgage rates have increased by over 100% since the beginning of the 2022, that has brought with it the inevitable and justifiable concerns of a weakening economy that could usher in the potential for higher delinquencies.  Lender have less of an appetite for slightly lower credit scores and higher loan to value loans (meaning those with lower down payments).  This is especially difficult for younger generations, first-time buyers, and people who have good but not unblemished credit scores.  According to a monthly index maintained by the Mortgage Bankers Association, September marked the seventh consecutive month in which mortgage credit availability fell, putting it at the lowest level since 2013.  This reduction in buying power brought on by higher rates and lesser availability is also a double-edged sword as it helps to create much needed inventory and extends time on the market giving would be Buyers more of a chance to compete for properties.  Normally that would be considered good news, but if buying power is slashed in half and mortgages harder to get, that good news might not seem so good after all.  As you navigate these waters, stay in contact with your industry professionals including Realtors, Agents, and Mortgage Lenders to make sure your action plan has the proper adjustments and to stay ahead of the news, which seems to be changing by the day.  Here at PropertyGuerilla.com we also think that adjusting HOW you search for properties is a great way to stay ahead of the pack as well, and that's the primary reason we created this site...to try and put some control back where it belongs, with YOU.  #realestate #buyingrealestate #sellingrealestate #mortgagerates #mortgageavailability #realtior #lender #FederalReserve #interestrates #MBA #propertyguerilla   

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