Too RISKY to Buy? Mortgage Rates and CPI | Should You Buy A House Now

It is just too risky to buy a house now? Rising Mortgage Rates and CPI

Interest rates are up again in reaction to the cpi number that came out yesterday the cpi is the consumer price index and that took markets you know everybody started a big stock sell-off and it also sent mortgage rates up significantly yesterday in reaction the average mortgage rate according to mortgage news daily is 6.3 percent so i wanted to come and give

You some advice as a first time home buyer i’m shahida hill getting you over the hill to home ownership and helping you confidently buy your first home now it is much more expensive as you know to buy a home in september than it was in january of this year on an average 400 000 house is probably about 700 more expensive to buy that same home right now so a lot

Of budgets had to be adjusted if you’re still in the more market for a home so i want to make sure that you know what’s coming ahead now the chair of the federal reserve jerome powell did have a speech about two weeks ago and i want to play about a minute of that speech so you have a better idea of what the fed is trying to do to reduce the the demand and reduce

Inflation and requires using our tools forcefully to bring demand and supply into better balance reducing inflation is likely to require a sustained period of below trend growth moreover there will very likely be some softening of labor market conditions while higher interest rates slower growth and softer labor market conditions will bring down inflation they

Will also bring some pain to households and businesses these are the unfortunate costs of reducing inflation okay so he said a couple of important things just in that one little clip he said the one that stuck with me the most was there’s going to be some pain almost preparing everyone for the pain that’s to come and the major pain is likely because we’re already

Feeling the pain in prices grocery store prices utility prices just the price of everything is more expensive so we’re already feeling that pain but the highlight i guess of this economy is that we’re employed that most people either have a job or they can find a job or maybe some people have more than one job so the pain that’s going to be in addition to the

Pain of inflation um is going to be he said softening labor market there may be layoffs because if they keep on making everything too expensive then companies are are not going to be able to afford to keep all of their employees so the the goal is right now there’s almost on average two jobs per person that wants one um they want that to go down and they want

The softening labor market is going to result in some layoffs so they’re preparing for that so it’s very important that you’re aware of this if you’re in the housing market and you want to make sure that you have a very very stable job you want to make sure that you have very very stable employment at this time because the cpi number did come in higher they’re

Expecting that the federal reserve will raise interest rates more aggressively at 0.75 percent next week so the fed meets next week and they’re going to be more aggressive because that inflation that cpi number was much higher than they anticipated and i just want to make sure that you are prepared for this i recommend a couple of things that you’re if you’re still

In the market for a house if you have to buy buy long term you’re going to be okay but if you don’t have to buy a house right now there’s really no rush to buy i don’t know of a good reason that you would rush to buy a house in this environment right now but i do want to make sure if you are purchasing that you have a couple of things i should have put this on i

Want to make sure that you have three to six months of expenses and this is after any down payment and closing costs i want to make sure that you have enough money and i’m not talking about reserves reserves are if your mortgage is a thousand dollars then you’re going to have three thousand dollars in reserves i’m not talking about that i’m talking about three

To six months of expenses so if you know it costs five thousand dollars for you to pay all of your bills every month food utilities everything thing that you need gas then you need to have at least fifteen thousand dollars saved for six months you would need to have at least thirty thousand dollars saved and that’s significant and most people are living paycheck

To paycheck so i want you to prioritize in this environment making sure you have three to six months of expenses before you purchase a house one of the major reasons that people experience foreclosure or cannot pay their bills is what they call income shop shock they lose their job they are get ill and they can’t pay their bills there’s some significant decrease

In their income they get a divorce and you know one spouse leaves and they don’t have the income that they used to have so you want to protect yourself against these income shop shocks and this for everybody not just for first-time home buyers but for anybody in this economy you need to make sure just in general good financial practice that you have three to six

Months of expenses saved so make sure you have that also make sure that you’re going to be staying in this home for five to seven years or more this is not the time to buy a house you’re going to live in for a year or two years so that’s also very important and then then you know again i want you to stay under and i did a video about this i will link it to the end

Of this video you need to stay under 35 and i know um that’s like how can i do that of your take-home pay and that will keep you at a reasonable level so if you were to you know have some income instability you’re still able to pay your most important bills but if you are pushed to pay you know having a lot of your housing a lot of your income going to housing it

May be difficult for you so you need to make your goal to get your housing costs less than 35 percent of your take-home pay and i did this video all about that i hope this was helpful please put any questions down in the um in the comments and i’ll get to those and join me live i’ll be live um tomorrow so and if this you’re seeing this video later please join me

On my lives and subscribe thank you so much look forward to talking to you soon

Transcribed from video
Too RISKY to Buy? Mortgage Rates and CPI | Should You Buy A House Now By Shaheedah Hill