Interest Rates… Have We Peaked Yet?
It is no surprise that we have been getting a lot of questions about mortgage rates over the last 12 months. At a basic level, the interest rate increases over the past year are a result of inflation, which the Federal Reserve has been trying to reign in. I like to remind people that we are not only back in a more normal real estate market, but we are also back at more “normal” mortgage rates.
The following chart was presented by Gary Keller, founder of Keller Williams, at the most recent agent conference in Anaheim, CA in February 2023. As you can see, the average mortgage rate over the past 30 years is 5.97%, which is about where we are now. In fact, the 50-year average mortgage rate is 7.81%, significantly higher than current rates.
We reached out to our preferred lender, Amber Kovarik with Guild Mortgage, for her perspective on why rates are where they are and where they may be going in the future. Here are Amber’s thoughts:
“Interest rates have moved up temporarily in the short run. So when do we see them get better and why do/did they go up? It was on February 3rd that we saw a blockbuster employment report. People thought 517K jobs were created because that was the headline, but it was due to a seasonal adjustment... It wasn’t real job creations!
We also saw the employment rate go down, people said to a 50 YEAR LOW! That was because of another adjustment called ‘population control adjustment’. They found workers they did not pick up in early 2022, and instead of attributing them to those months they said let’s just lump them as a phantom gain in January 2023. That was 810K jobs! So, the employment rate went down when it should have gone up.
We are anticipating rates to come down beginning May 10th. That is when we should have received enough inflation data to show what the Fed is doing with the raising of the Federal Funds Rate and whether it is working and inflation is trending downward.
We will hopefully get some relief before that. On March 10th we should get a friendlier jobs report that is more realistic to the bond market; and on March 14th an inflation report that is also a little more friendlier. We are not out of the woods yet. April could still be rocky but we should see a much more favorable picture in the middle of May. We are not going to get the improvement all at one time, but over the summer months, we should see much more favorable interest rates.
So although we are expecting interest rates to come down later this year, we recommend buying NOW while they are still up. As soon as the rates drop, we are anticipating demand to pick up considerably which will mean rising home prices, homes going for over list price, lack of choices, and loss of any buyer negotiating power. Buy now to get the best price and then we will complete a no lender fee refinance for you when interest rates drop! It’s a win-win.”
Thanks Amber! The Kolb Team is fortunate to have a mortgage professional like Amber in our corner!
The Kolb Team
Vendor of the Month
Caring Transitions of Central Arizona is the professional solution for relocation services including downsizing, decluttering, and estate sales for both full and partial liquidations. The company serves Chandler, Gilbert, Mesa, Sun Lakes, Tempe, and Ahwatukee and surrounding areas.
Caring Transitions of Central Arizona offers a streamlined support system to help facilitate a less stressful transition, taking care of the details so you can take care of yourself or a loved one.
480-257-7127
https://www.caringtransitions.com/locations/mode/central-arizona
Bridge Loan
What is a bridge loan? A bridge loan is a short-term loan used to bridge the gap between buying a home and selling your previous one. Sometimes you want to buy before you sell, meaning you don’t have the profit from the sale to apply to your new home’s down payment. This can be a challenge if you were depending on that money to buy your new home. In the meantime, you can apply for a bridge loan to help finance a home purchase.
How does a bridge loan work? A bridge loan will help provide funds for your new home purchase if you do not have it readily available. The most common way to use a bridge loan is for closing costs. You can apply for a bridge loan with a lender. Although terms may vary, it’s standard to borrow a maximum 80% of both your home’s value and the value of the home you wish to buy.
How can you get a bridge loan to buy a house? To qualify for a bridge loan, your lender will look at standard credentials like your debt-to-income ratio, how much home equity you have, your credit score, and possibly your household income. It helps if you’ve been a good mortgage candidate with your first home. If you do not have a decent amount of equity in your current home, it may be hard to qualify. If your lender determines that you are an ideal candidate, you may experience a faster approval process for a bridge loan than you did for a traditional mortgage.
How do you repay a bridge loan? The loan typically lasts about a year until you begin making repayments. It’s beneficial to structure it so you can use the money from the sale of your home to repay your bridge loan. There’s usually a final due date for when the loan needs to be paid back in its entirety. It’s important to work out the terms of repayment with your lender and make sure you’re clear on the steps going forward.
Nobody Knows About Sun Lakes More Than We Do!
Searching for That Perfect Home?
When looking at pictures online, it can be tricky to figure out the layout of a home. We can help you with that! On our website, you can access the most popular floor plans in Sun Lakes, AZ. Just click the button below!
Pet of the Month
Meet this month’s Pet of the Month
Congratulations Patches! Your mom told us, “After the loss of our beloved black cat Lucky last year, we needed a new furry friend to keep our remaining cat company. That is when Patches entered our lives.
She is a cuddly, soft, loving, little love bug who keeps us endlessly entertained and fills our hearts with joy”. Tell your mom to watch her inbox for your Chewy Gift Card!
If you would like your pet to be featured in our Pet of The Month and win a Chewy gift card for your sweet family member, send a picture to info@thekolbteam.com and tell us why your furbaby makes you happy. We look forward to seeing all of your awesome pet pics!
Baked BBQ Chicken
Ingredients:
- 1 chicken, spatchcocked & cut up (drumsticks, thighs, wings, & breasts)
- Salt
- Pepper
- 1 C salad dressing
- ½ C ketchup
- ½ C barbecue sauce
- 1 Tsp chili powder
- 1 Tsp paprika
- 3 Tbsp honey
- 2 Tbsp lemon juice
Directions:
- Place chicken evenly in flat dish, then salt and pepper to taste.
- Mix the remaining ingredients together and pour over chicken.
- Bake at 375°F for 1 hour or until chicken is cooked through and at least 165°F, turning every 15 minutes.
Why Arizona and Not New Mexico?
Arizona and New Mexico are both gorgeous states with many natural wonders and beautiful scenery to behold. So why has The Grand Canyon State’s population grown so much faster than the Land of Enchantment? According to YouTuber “Geography By Geoff”, the answer is relatively simple.
The 2 states share a very similar history:
- Both, along with several other states, were part of Mexico’s territory until the Mexican-American War and 1848’s Treaty of Guadalupe Hidalgo was signed.
- Known then as the New Mexico territory, the region where both states now exist was embroiled in the Civil War and a debate about whether it would side with the Union or Confederacy. Not surprisingly, early on, both sides claimed the territory as theirs. There was a division that went east to west (as opposed to north and south as on the east coast during this time) and the northern 2/3 was won by the Union, while the southern 1/3 was won by the Confederacy and called “Arizona”.
- When the war ended, borders were re-drawn, and the western part became Arizona, while New Mexico was the name given to the eastern part. Both were still territories in 1865.
- Every state west of the Mississippi River became admitted to the United States before New Mexico and Arizona did, but on January 6, 1912, and February 14, 1912, respectively, they joined the party. At the time of admittance, New Mexico had almost twice as many inhabitants as Arizona. By 1950, the tables had turned.
Even though both are desert states, Arizona has the advantage when it comes to one of the most important resources there is in sustaining life – water! Our state receives water from several different sources, with a large percentage coming from the Colorado River. New Mexico has the Rio Grande, but it isn’t nearly as plentiful. New Mexico’s main source of water was also claimed by Texas, and a legal battle over water rights ensued. As if that wasn’t threatening the area enough, the volume of water moving down the Rio Grande is just about 10% of that of the Colorado River, which means there’s less water to go around the Land of Enchantment from that source. Agriculture needs water, and this fact helped Arizona attract more people than New Mexico starting in the early part of the 1900s.
Elevation also plays a part in this story. Albuquerque sits about 5300 feet above sea level (FASL), with the average elevation of its state at 5000 FASL. Arizona’s average is 4000 FASL, so not too much different than our neighbor state, but Phoenix sits at about 1200 FASL. This means that our capitol has a much milder winter than our neighbor’s capitol. You’ve surely heard the term “Valley of the Sun” before, and now you have the numbers that show how this moniker came about. Even though between NM grew by double digits every single decade since the 1970s, Arizona handily outpaced it.
Phoenix is home to about 5 million people and 4 major league sports teams, including the Cardinals (NFL), Suns (NBA), Diamondbacks (MLB), and Coyotes (NHL). Albuquerque hosts about 900K residents, but unfortunately, doesn’t get the benefit of the revenue our sports teams bring in, as the city lacks any major league ones to speak of.
New Mexico’s population is approximately 2.1 million, but Arizona is where 7.3 million people call home. Water, and all that it sustains and supports, is perhaps the biggest reason why!
See What Our Clients Are Saying!
“It is as if they are working exclusively for us!”
Kathy and Steve
- Pennsylvania
Searching for That Perfect Home?
When looking at pictures online, it can be tricky to figure out the layout of a home. We can help you with that! On our website, you can access the most popular floor plans in Sun Lakes, AZ. Just click the button below!
Buyers of the Month
We have buyers who are ready, willing, and able to purchase and can’t find homes. If you or someone you know is thinking of selling and can accommodate, get in touch with us.
We have your buyer!
- Buyer looking for a home with a view and 2.5-car garage with some updates.
- Buyer looking for a view home with a pool.
- Buyers looking for a home 1700-2000 sq ft with north/south exposure.
- Buyers looking for a 2BR + den with a private back yard. Ok to do some updating if needed.
Recent Real Estate Sales in Sun Lakes
Wondering about your Neighbor’s Home Sales Price? Find out here to see what sold last month. The report is broken down by HOA, address, and floor plan (if the agent listed the model in MLS).
We Are Committed to Helping End Polio Now!
We will donate $100 in your name to end polio around the world, when you list your home for sale with us!
You may also donate directly here
Would You Like a Free Buyer Guide or a Seller Guide?
Get Insider Information
We live, work, play, and volunteer in Sun Lakes and we know the ins and outs of this community.
As always, if you or someone you know is considering buying or selling a home,
we are here year-round and would love to help! Visit us online at
TheKolbTeam.com or call 480-809-5759.