When Are Home Prices Going Drop? Heress When Broker explains. Mortgage Rate Update 8.15.22

Understanding the rates provided by different mortgaging lenders is important in understanding the best financial state to put yourself in. In this video we will be pricing out the following mortgage rates and showing the comparison of what we offer vs big banks. If we are beat on rate then it is what it is but we strive to make sure all of our clients get the best rate regardless if its with us or not. The big question in real estate is when are home prices going to take a big drop? Well the question is a bit of a loaded one since we have so many different factors to deal with. The first answer will be our neighbors across the pond in china. The mortgage boycotts and the massive losses banks are taking could potentially be a crash in the market so we can keep a close eye on that market. The slow adjustements will be based on interest rates and the amount of time it takes for real estate to catch up. seller could see a massive loss and our projections will be the big decline will come 2 quarter of 2023. Let me know what you think. also learn how to get the best mortgage rates and how we are competing with big banks.

Hey what’s up guys omar here broker and ceo of alden mortgage and oma realty so we’re gonna do another mortgage rate update let’s see where the mortgage rates are as of 8 15 2022 and then a big question we always get asked is omar when is the home price is going to start dropping when is real estate going to drop is there going to be a crash or this is this going

To be a correction now the key thing is to understand what the difference between a crash and a correction is now a crash is anything over 28 in home sale prices decline and then a correction is anything other 10 that is prices decline so is it going to be based off of pre-pandemic levels or is it going to be based off of current levels now that’s going to be

In the course of a year and and you know it’s it’s hard to analyze this to be honest with you because the real estate market it’s been unheard of the way that it’s been going in the past two years in the past two years it’s just been absolute just lunacy when it comes to home prices increasing so much and this over bidding and everything like that and for the

First time ever hedge funds are getting into the uh game of real estate and and purchasing properties that is a bit of a downfall because they tend to hold a lot longer now will they if home prices start declining will they start to get a little bit freaked out because they’re like oh my god you know the books our books our balance sheet is just going completely

Nuts it’s we have to get rid of this because then their portfolio is just not going to look as good even though it is rental income producing their total assets on their book is going to look like it’s dropped dramatically because their homes are those homes are not appraising for the same amount which devalues the company as a whole but let’s get on with the

Mortgage rate update we’re going to be pricing on 10 different mortgaging products as of 8 15 2022 30 year fixed we’ll be sitting at 4.49 percent 15-year fix will be sitting at 3.62 percent 30-year high balance is going to be sitting at 4.84 percent dscr loan which is a debt service covered ratio this is a loan product for investors that want to go ahead and use a

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Income producing property as rental the rental income to go ahead and qualify you based off of just the income coming in off of that and then opposed to that will be the debt so that’s why it’s called the dscr a debt service covered ratio loan so for instance if you had a thousand dollar total in rental income coming in versus a thousand dollars principal interest

Tax insurance going out that’ll be a one-to-one ratio which we typically do not like to see a one-to-one ratio anything above one 1.15 and above is usually where we’d like to stay at which kind of gives you veggies a different like you know how small the margins are whenever you’re coming to uh the rental side of things so whenever people think that oh you know

You’re you’re a you’re a this real estate guy and you have 15 20 homes you’re doing great no the rental margins on majority of produce income producing properties are not as big as most people think that they are so bank statement loan will be sitting at 7.55 that is going to be income based off of what’s coming in total deposits going to your bank statement

Versus the total uh debits that you have leaving it and then we go ahead and do a ratio based off of that that’ll be sitting at seven point five five percent that is one of those non-agency non-qualified mortgage products fha thirty or fixed we’ll be sitting at three point eight two percent seven six adjustable rate mortgage will be sitting at four point seven

Zero percent usda thirty are fixed we’ll be sitting at three point eight five percent va 38 year fixed we’ll be sitting at three point eight nine percent hard money fix and flips it’ll be sitting at nine point two five percent now that’s for people who want to go and do it’s a short-term loan typically it’s a short-term loan not all of them are short-term loans

But it’s a short-term loan for you to go ahead and get some capital purchase the property go ahead and fix it up rehab it and then go ahead and sell it for a profit so that’s going to be your mortgage rate update and if you are interested in any one of those mortgage products and more link in the description below and for up to 50 commission rebate zero percent

Listing on selling your home all uh home link in the description below but the biggest question of course we always get is hey our home price is going to go ahead and go down and like i just stated you know there is a big difference between correction and crash now the hard part about this is trying to understand hey is this going to be a crash based off of

Pre-pandemic levels or post-pandemic levels because let’s just face it the last two years is unheard of how much homes have inflated and and appreciated and valued so much and at the same time they’re kind of slightly declining as well too so we’re gonna we look at a majority of all different countries we look at you know first primarily i look in the california

Market then i look in the united states then i look at canada then i look at china these are the mostly densely populated areas you have to look at the who has the highest you know as far as total economic production that has uh that has coming in you know china is one of the big ones that are super heavily populated their real estate market and some of the

Places like in hong kong shanghai all those they’re very very densely populated so what we’re going to look at is california now in california we have started seeing a decline like even just as of may 2022 in may 2022 just a few months ago home prices on single-family homes were running around 900 000 has dropped in june to 863 000. now these numbers go based

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Off of quarters that’s why it’s uh the numbers are out in june but the year-to-date sales on single-family homes have dropped by 28.9 percent condos have dropped 27 27 is huge now that’s mainly because majority people hate the hoas and hoas make it so damn difficult to go ahead and get into a home that you want to stay because the whole purpose of buying a home

Is for somebody to not tell you what to do whenever you bought said property now there’s plus sides have hoa then there’s downsides of uh hoa the plus side is is that if you had a homeowner’s association you don’t have to worry about you know uh the streets you know having broken beat up cars or like you know parties going whenever those are the bad parts about

It or the good parts about it and the bad part is is that you know you do have like a big brother that’s always watching over you but as a whole in california we have dropped probably between 23 to 25 total on average year-to-date sales now the change in total prices is not as much as you would think now single-family homes in june 2021 now this is as things

Were peaking where 819 630 in single-family homes and then in june it went to 863 in may it was at 900 000. so you see how much it has just appreciated and that is just as of june 2021 now june 2020 was much more lower than that the average was somewhere in the sevens and then going pre-pandemic levels the average was probably somewhere in the low sevens high

Sixes so do we count it based off of that or we counter based off of this now if we do have let’s say a 20 hit a 20 hit will just put us like you know pre-pandemic levels so is it really going to take that much of a hit now coming here in the next month in september the feds are going to hit us with another rate but a rate increase which is going to be the fed

Fund rate that’s going to be the amount that each bank charges each other to go ahead and buy these and sell these uh it’s like buying and selling money pretty much that’s pretty much what real estate is mortgaging is a way for you to have something that’s tangible for them to go out and buy and sell money because if you have let’s say a eight hundred thousand

Seven hundred thousand dollar mortgage product at the end of your advertising table on a 30-year fixed rate you’re you’re you’ll see how much you’re going to be dumping into it now the long-term effects of this is that you know whenever you’re buying and selling majority people whenever you have a first-time home you’re going to go at an upgrade or you’re going

To refinance or you’re going to do something so this is a way to keep the ball rolling and keep money just coming in and and for them to go out and have some sort of income now like i said we have to look at every single one of these big markets canada market american market chinese market and see where they’re going now canada has taken a 29 uh hit as far as

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Year to date sales canada home they dropped for the fifth straight month in a row and here in california uh we have dropped probably the this is going to be the 11th month that we have dropped now the china china market is one of the big ones china market now they have they have this thing where you know they have this zero covet policy that they have going on

So because of that zero covert policy a lot of these people are just protesting not trying to give any money into the banks they’re like you know we’re not gonna pay our mortgages because you guys are putting us between a rock and a hard place if anyone buddy has covered you’re stuck at home that means your savings is dwindling your your total income is going

To be affected everything is going to get infected now majority of these real estate firms here in china that are not here in china but over there in china you know they’re incentivizing buying homes like crazy stuff like oh i’m going to give you a pig for a 200 pound pig if you buy this home or i’m going to buy you a car or i’m going to do this and i’m going to

Do that they’re trying to do a bunch of things but china bank they may face up to a 350 billion dollar in losses and because of the whole property not paying mortgages and and you know these asset management companies that are not they’re just not producing anything because they don’t have people that are trying to buy anything at all now canada is one of those

Other ones united kingdom is another one of them united kingdom they take they took a small hit now that’s mainly because they don’t have as much newly developed homes as we do here in the united states we just we’re just going nuts especially we have dr horton which was one of the biggest ones they think they had like a 29 decrease in sales so all these big

Builders they’re pumping the brakes especially because we’re coming into the slow season now we’re projected that we’re gonna find out exactly where we stand in the real estate market probably in the next march april time right before the busy season comes in that’s where we’re really actually going to know where our numbers are because a lot of these counties

Especially here in california we still have eviction moratoriums where you can’t evict people so a lot of private investors small mom and pop you know landlords they’re kind of getting dwindled out they still can’t evict people people are just kind of taking advantage of the system as a whole but for the first time the uk has taken a 1.3 um hit and then in china

Property sales has plunged over 30 now but s p they say that this could possibly be worse than the 2008 crash that we had now that’s a bold statement coming from the snp that’s going to be your mortgage rate update so if you want to go and stay up to date with the real estate market and what’s going on and how everything is panning out go ahead and like subscribe

Comment until next video guys i really appreciate you watching for up to 50 commission rebate zero percent listing on selling your home or any mortgage assistance link in description below until next video guys i really appreciate you watching peace is

Transcribed from video
📉📉 When Are Home Prices Going Drop? Heres's When Broker explains. Mortgage Rate Update 8.15.22 By OMA RLTY \u0026 Alden Mortgage