Mortgage Rates are in the news, again.  Florida Realtors reported some significant numbers today. The statistics show that average mortgage rates have fallen but not by much.   A 30-year fell to 4.51% from 4.53% last week.  We look at all such figures with a grain of salt, anyway. Here’s why mortgage rates do not tell the whole story.

Mortgage Rates:  The Mortgage Broker’s Secret

We see house hunters get very focused on mortgage rates.  But let us tell you a big secret:  Seldom do average rates or predictions mean anything once we factor in various elements of a home -buyer’s fiscal life.

Caution Sign – Higher Interest Rates Ahead but they are’t the Big Picture.

We are not worried however about the alarmist reports, because we know last year’s amazing average of 3.86 percent for some mortgages was a dream rate. It was not business-as-usual. It was a part of an initial surge in our economic recovery.

The Magic of Mortgage Rates and Hype

We knew the market could not sustain incredible low rates for long.    So, while figures fluctuate, we find calm in the big

picture.  If you want to see the big picture too, keep reading. So the negative news that  long-term U.S. mortgage rates fell this week is not a surprise. And it really is the third week in a row for the rates to fall. But is that news? We have noticed the trend over the last seven years, as we saw interest charges rise higher and higher.

However, in great contrast, we also have recently seen incomes rising, optimism rising and unemployment falling.

Yes, rates remain significantly higher than a year ago. But, take note, we realize the rates are nowhere near long-term historic averages. Obviously rates create an important industry fact.

The Palm State Big Picture of Mortgages, Houses and the Housing Market Right Now. 

However, there is a lot more to a loan than rates and points, which is why Palm State Mortgage Company so seldom

mentions them in detail in our educational blogs.  Let’s take a look at some factors in the Palm State Big Picture of Mortgages and the Housing Market Once again, in case you missed a point mentioned above, we remind you that these rates do not always pertain to your financial picture.

They do not necessarily reflect rates available to you.  And they do not show you much about the deals you might make with a special lender your mortgage broker finds for you.

Mortgage Rates vs. the Big Picture

Factor One the Housing Market:  Many Homeowners are Remodeling. Just take a look at Houzz, and you will see a big trend in the remodeling industry.  “Despite an apparent slump in the existing home sales data,” Nino Sitchinava, principal economist at Houzz said, the outlook for the home improvement market remains strong for the rest of the year…”

Some of our clients are discovering that our re-finance loans give them the opportunity to improve their home rather than sell it.He added, “At the start of Q3, remodelers on Houzz reported an average project backlog of 10 weeks, that is five weeks higher than the same time a year ago.”

Your Palm State Terrific Take-Away on the Trending Home Remodeling

Now, this Re-modeling trend might not show as a big improvement in the hyped-up housing market statistics. However, we think it shines in our communities, neighborhoods, states and our nation in the Big Picture of US economic growth and recovery.  And the houses the remodeling, re-fi homeowners don’t buy, enrich our inventory. Plus, eventually, remodeled houses sell at increased value. Everybody wins. All it takes is a little time.

Factor Two in the Housing Market Big Picture: Home-Building

Housing Availability and a Surprise Villain:  Are you following stories about tiny houses? Likewise do you find reading stories about sprawling movie-star homes irresistible?

We can’t blame the home-builders for loving the media attention that unique and luxury building brings them. However, the above anomalies at two ends of the home-building spectrum reveal an ugly secret. Home-builders and the housing industry are neglecting a large segment of the home-buying population:  Low-end hou

Mortgage Rates

Mortgage Rates and trendy projects have a dark relationship. We show you how.

ses, starter houses, medium sized and lower-priced houses are less and less available. We can’t blame the interest rates if the low-end houses are not even built; it’s a moot question.

Perhaps low-end housing is simply not as much fun to build, and we know labor and construction goods are a challenge.

And the media completely ignores praising the efforts made by builders in this sector.  If you are a builder, and you are specializing in high quality, low-end housing construction, we salute you. And we applaud. We’d love to see your stories and the stories of the home-owners you help.

Factor Three: The Big Disclaimer -Builders are Not the Villains But They Need to know the Situation

By pointing this out, we do not mean to disparage home building and growth, not in the least. Danielle Hale, chief economist at Realtor gave builders compliments where they were due.

“This year’s building and growth in new home sales have helped alleviate shrinking inventories for both new and existing homes which have been a major obstacle to home sales.”

Then she added the zinger, saying, “Now home shoppers are starting to see more choices, but not necessarily in the price range they’re looking.”

We think those are very sad words.

Mortgage Rates and a Little Advice from Dave Ramsey

Higher Interest Rates don't mean you can't find a home you'll love.

Mortgages Percentages Might Not mean as Much as You Think. There are New Forces That Will Drive You to Your New Home

We still like the advice of money guru, Dave Ramsey who has often stated, “If you can’t afford to buy the house you want, be willing to sacrifice some would-like-to-haves for the must-have.”

Likewise, he explains how to wait for your dream home, “This doesn’t mean you have to kiss your dream home goodbye forever.”

And he adds our favorite mantra, good against any interest rate calculator:  “If you find the least expensive home in the best neighborhood you can afford, you can upgrade over the years as your income and savings increase.”

A Tiny Terrific Take-Away:  We noticed an interesting statistic while doing our research. If you can budget your life style and pay off your mortgage a little faster than 30 years, you might choose a 15-year loan.  Again we do not like to quote averages, but will. You see, the average rate on a 15 year, fixed-rate loan dropped from 4.01 to 3.98. Nice Option!

You might be hearing more about The Palm State Big Picture of the Housing Market in upcoming blogs.  Palm State Mortgage is watching out for you, and saying…Keep Calm and House Hunt On.