June 15th, 2017
Last week, the Federal Reserve raised its funds rate by a quarter of a point - and mortgage rates shrugged off the news and decided to head lower rather than going higher. As you've read in these pages before, this shouldn't be a surprise. The movement of mortgage rates is based on much more than what the Fed does or doesn't do, not to mention that the markets anticipate these kinds of moves and "bake them in" before they happen (and this hike was previously telegraphed). What happens to mortgages in the long term remains to be seen because of those other factors and the Fed's policymakers projecting more hikes in 2018.
In the meantime, the home-buying news often reads like a conflict-laden romance novel. As of this writing, the top two mortgage-related articles on a well-known news website are (paraphrasing to protect its identity), "Don't Buy a New House" and "Mortgage Applications Jump on Low Rates." On the one hand, the first article says that, based on a report from a noted university, renting and focusing on personal finance and investing is a better option than buying. On the other, which is simply reporting statistics, people are taking advantage of the lowest mortgage rates since November's election increasing applications by 7.1 percent.
Granted, these are condensed versions of both articles; however, taken together, it points out your reality as a real estate professional and that of buyers and sellers: people who want to buy/sell homes will buy/sell them. That's the thing about statistics: whether it's homebuyer/builder sentiment, existing/new home sales and more, they ultimately aren't going to change a buyer's or seller's mind. Are they indicators of how the housing market is going? Yes. But as you stop reading this article to take a call from your buyer, who is saying, "I'd like to look at houses this weekend," all of those statistics - and all of the articles about who is renting and who is buying - don't, as Rick in Casablanca noted, "amount to a hill of beans."
You can talk all day to a buyer about available inventory, house prices, mortgage rates, etc. - but if they are ready to buy a home, none of that matters to them. If they have made up their mind and, after working with a trusted lending professional and you, have determined that they have the means to do so, then the number of new home starts or the sentiments of builders - or the Fed raising the rate by a quarter of a point - isn't going to stop them.
Right now, it's not about anything but them and you. Here. Now. At this moment when they want you to show them houses on Saturday. All of the news, all of the statistics - good and bad - don't help sell or buy houses.
It's all about your attention to detail, superior service, knowledge and experience. Focus on what you do well: providing buyers with education on what they need to know to make informed home-buying decisions and sellers with insight into how best to position and stage their homes. And if they come to you hesitant about whether, what or where they can buy, then that's when you show your deepest value - not by saying, "Well, according to the latest statistics..." but, "Let's first sit down and talk about your needs and goals."
In the end, the most important number is "one": how you make your buyers - and sellers - feel when they work with you.