Buy Now, Refinance Later: Smart Moves for Today's Market | Real Estate Market Update w/ Martin Perdomo

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Mortgage rates have fallen to 6.35%, down from over 7% last fall, and homebuyers are responding. Purchase applications are up for the fourth consecutive week, and property touring activity has surged 14% from last month. This renewed interest suggests a market beginning to thaw, potentially creating a window of opportunity for prepared buyers in early 2025.

The current landscape offers a strategic advantage for buyers - prices have dipped 2.5% year-over-year to a median of $367,500, and competition remains softer compared to previous years. The "buy now, refinance later" approach could be particularly advantageous, allowing buyers to secure property at today's more negotiable prices with the option to refinance when rates potentially decline further. As summer approaches, market activity is expected to accelerate significantly, potentially driving prices higher once again.

A concerning countertrend demands attention: mortgage delinquencies in government-backed loans have surpassed pre-pandemic levels. FHA loan delinquencies have risen to 11.03% and VA delinquencies to 4.7%, while conventional loans remain stable at 2.62%. This widening gap highlights growing financial stress among lower-income Americans and raises critical questions about sustainable homeownership accessibility. For investors and property managers, this trend could impact tenant stability and warrants close monitoring in the months ahead.

Stay ahead of these shifting market dynamics and learn how they could impact your next real estate move. Subscribe now for weekly updates and visit WealthyAF.ai for exclusive insights, strategies and tools to navigate today's complex housing landscape with confidence.

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Episode Transcript

Speaker 1 (00:00):
Welcome back to this week's real estate market update
, where we cut through the noiseand focus on the numbers that
really matter in today's housingand investment landscape.
Whether you're a seasonedinvestor, a first-time buyer or
someone just curious aboutmarket trends, we've got the
insights you need to stay ahead.
Let's jump into the latestupdates.

(00:21):
We start with some good news.
Early stage home buyer demandis improving as mortgage rates
fall slightly.
According to Redfin, mortgagepurchase applications increased
by 1% over the past week, makingthe fourth straight week of
growth.
The average 30-year fixedmortgage rate has dipped to
6.35%, down from the peak ofover 7% last fall.

(00:48):
While homebuyers' competitionremains softer compared to
previous years, the easing ofmortgage rates has brought more
buyers back into the market.
Redfin reports that touringactivity is up 14% to last month
, signaling that prospectivebuyers are beginning to feel

(01:10):
more confident about their homesearches as rates decline.
However, while rates haveimproved slightly, affordability
remains a key challenge, withprices still high in many
markets.
Home prices are down 2.5%compared to a year ago, with the
median home price now sittingat $367,500.

(01:34):
The inventory of homes forsales continue to be constrained
, falling 17% year over year.
For sellers, this may meanslower activity in some regions.
For buyers, there's growingopportunity with lower rates and
potential more negotiable pricepoints.

(01:54):
If you've been waiting for theright moment to buy, this could
be the window of opportunity, as2025 begins to show early signs
of demand recovery.
If you're a buyer, I think thisis a great opportunity, even
though the rates are a littlebit higher.
However, I think that later in2025, this summer, we are going

(02:18):
to see the market is going toheat up and, I believe, in the
years to come, real estate isgoing to come back hard and
strong and it's going to come.
The demand is going to go upagain and prices are going to
continue to climb as ratesdecrease.
So if you're in the market, Iwould definitely advise.
If you're in a position, to goand take advantage of the lower

(02:41):
prices today.
As rates will change, you canrefinance later.
My financial advice is what Iwould do if I were in the market
for a house.
Quick reminder if you want tostay up to date on how these
shifts in the market couldimpact your next move, make sure
to log into Wealthy AF.
At wealthyafai, we'reconstantly updating our members

(03:06):
with the latest news, tips andstrategies to navigate the real
estate landscape.
Don't miss out.
Sign up now.
Next, a more concerning trendRising mortgage delinquencies
amongst borrowers withgovernment-backed loans,
particularly those in the FHAand VA programs.

(03:26):
According to recent data fromthe Mortgage Bankers Association
, the delinquency rate for FHAloans climbed to 11.03% at the
end of last year, while VA loandelinquencies reached 4.7%.
These numbers have nowsurpassed pre-pandemic levels,

(03:50):
experts sounding the alarm thatthese growing delinquencies may
be a signal of financial stressamong lower-income Americans.
Fha and VA loans are popularamongst borrowers with lower
credit scores and smaller downpayments, and with interest
rates remaining high, many ofthose borrowers are facing

(04:12):
increased financial pressures.
While conventional mortgagedelinquencies remain low at just
2.62%, the gap betweengovernment-backed and
conventional loans is widening.
Inflationary pressures, highhome prices and persistent
interest rate increases havedisproportionately impacted

(04:37):
lower-income borrowers, leadingto a spike in late payments and
missed mortgage payments.
Knightley from ING warned thatthis is just the beginning.
As inflationary remains abovethe federal reserve's target and

(04:57):
borrowing costs continue torise, the risk of higher
delinquencies across the boardcould grow.
For investors and propertymanagers, this is a trend to
watch closely.
As delinquency increase, tenantturnover puts financial strains
for borrowers in the housingmarket Something definitely to
watch out for.

(05:17):
What's the solution to thisproblem right?
How do we, as a country, helpthe poor, the poor, the lower
class and the poorer people getinto home ownership without
setting them up for failure?
That's a big solve that the bigbrains like Elon Musk and this

(05:42):
current administration have tofigure out.
What do you think is thesolution?
How do we solve for this?
That's a wrap for this week'sReal Estate Market Update.
Remember, staying informedgives you the edge, whether
you're buying, selling orinvesting.
Make sure to subscribe to stayup to date in the latest real
estate trends.
We'll see you next week withmore data-driven insights to

(06:05):
help you navigate this realestate market.