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Tune Out the Noise

Tune Out the Noise


The biggest challenge is to tune out the noise.

Because of the constant chatter regarding rising rates, many potential buyers are {irrationally} scared of entering the market. I have seen people become so paralyzed that they won’t even contact a lender to get a preliminary read on a mortgage preapproval. Its mind boggling to me how they are deciding an outcome before even doing their own research. 

It’s true that mortgage rates have increased the monthly payment on a median home by more than 55% in 2022, but that’s because the Y/Y comparison is to 2021, which saw once-in-a-lifetime low rates. Freddie Mac started tracking the national average 30 year fixed rate in 1971 (swipe right) and since then we have seen rates as high as 18.27% and a historical average rate of 7.77%. Today, the national average is 5.13%.

There are so many additional inputs into an individual mortgage beyond the Fed Funds rate. Inflation, unemployment and jobless claims, location, individual credit score, and down payment all factor in to what your personal rate will be. I have clients who were approved for 4% and 4.5% 30 year rates this week, far below national averages.

So tune out the noise, do your own research, and get comfortable with making contrarian moves, because as Charlie Munger put it, “mimicking the heard invites regression to the mean.”

For more of my thoughts, check out this article in The Real Deal.


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