Mortgage Rates Up the Last Year
Action by the Federal Reserve Board (Fed) has important impacts on home buyers in Northern Virginia. The Fed determines the federal funds rate, which is the principal driver of mortgage rates for a home loan. While rates are still at historic lows for buyers, the Fed has increased rates three times so far in 2018, moving the cost of a 30-yr mortgage from 4 to just under 5%. That may not seem like much to some, but depending on a buyer’s loan amount it can mean a few thousand dollars or more in additional loan costs each year. I wrote an article for my clients earlier this year that addressed the high probability mortgage rates had likely bottomed and showed the reasons why higher rates should be anticipated.
The good thing about increasing interest rates is it’s a sign of a strong economy. The Fed cites growing GDP, low unemployment, and rising incomes among the reasons supporting the firming monetary policy. The Fed also increases rates to control inflation in a growing economy. Controlling inflation provides real benefit to home buyers as it also works to contain home prices. These factors in the general economy are all good for home buyers and they should be optimistic.
Highly Effective Agents Help Buyers Successfully Navigate Increasing Rates
In respect to interest rates, highly effective agents collaborate with buyers to help them understand the specific impacts and opportunities that exist in a rising rate environment. First, agents should be able to fully explain rate adjustments as they occur and show buyers the precise effect on a mortgage payment for homes in the buyer’s price range. Also, agents have strong relationships with lenders. They use these relationships to stay abreast of the growing number of Conventional, FHA and VA loan products. Good agents and lenders constantly collaborate about strategic opportunities for borrowers. In fact, I do it on a weekly basis with my lenders. This enables me to provide the information necessary for my buyers that lead them into effective dialogue with a lender. The shared goal I have with my lenders is to be the conduit of information so my buyer can make the most intelligent decision when selecting a loan that best fits their needs. Further, an agent can even work on a buyer’s behalf to negotiate a seller subsidy. A seller subsidy is money from the seller that can be used by the buyer to buy-down the interest rate, thus lowering their mortgage payment. My point in all this is with every action (in this case an increase in interest rates), highly effective agents stand at the ready in search of an opposite and equal reaction to benefit their clients.
Multiple Technical Signals are Springing Opportunistic Buyers into Action
There is a confluence of market forces favorable to buyers in today’s Northern Virginia real estate market. Highly effective agents know this and are actively discussing these forces with buyers. One example of is the DC-MD-VA Housing Affordability Index which is now positioned at its most buyer-friendly level in years. Another example is agents are pointing out the cooling off of the hot housing market experienced during the last few years. They are seeing demand wane causing prices to plateau – home prices are projected to remain flat to decline slightly in 2019. Agents are also showing buyers multiple examples of homes staying on the market longer slowing absorption rates. This works to a buyer’s advantage as sellers are engaging in more frequent price reductions to ultimately reach a contract. In fact, in July the percentage of homes selling above list price declined for the first time in over three years. Second level thinking agents are even discussing rate risk with buyers and how possibly increasing rates into next year could effect buying power.
Present conditions are ripe for buyers who are opportunistic in strategy. During a recent think tank meeting of business leaders at AveryHess, Scott Avery, President of AveryHess shared, “As I see it, today is the beginning of a near-term winter opportunity. Well priced inventory is appearing, current sellers are lowering prices, seller price concessions are back, multiple contracts are fewer, and builders are offering incentives. These are the hallmarks of buyer opportunity”. Many buyers once frustrated by their difficult positioning in the recent one to two years have regained focus and become opportunistic in their thinking. They now notice the change in market texture and look to take full advantage of the compelling value at hand. I can help you do the same – please contact me if you’d like to explore the opportunities!
“It is with much enthusiasm that we share with you our thoughts about Tim Trainum. He his the most knowledgeable and informed real estate agent with whom we have ever dealt. Over the last 45 years we have bought and sold a combination of 26 homes, condos, and multi-family apartment buildings in Fairfax, Arlington and other parts of the country. Tim is without a doubt the complete package. He did everything we asked him to do. He gave us great information and advice and kept us informed as to his progress day by day. We highly recommend him.” – Dean and Mary Simonds
I am a high-value agent who delivers demonstrably useful results to my clients. I operate my business with relationship-focused interaction that aligns client goals with beneficial outcomes. I have an unyielding commitment to being an open and honest advocate, ensuring my clients reach their desired outcome efficiently and with the most equity. My overarching passion in real estate is to join your buying and selling journey and help improve your quality of life.
I am a full-time, licensed Realtor® who has established deep roots and knows the region. I was born and raised in the Northern Virginia area, graduating from Chantilly High School and then James Madison University with degrees in Economics and Finance. I live in Fairfax with my wife Liz and our seven year old son Robby. I’m a homeowner myself and understand the important decisions my clients face when they’re buying or selling a home. In addition, I’m an owner of investment property, including a multi-family apartment buildings. I have a penchant for helping people having taught adult education courses in investing and personal finance, and helped numerous clients, friends and colleagues in creating a path to wealth creation. I also serve as the trustee for a private charitable memorial fund.
I have been working in the real estate industry helping clients for over 25 years. As a Listing Agent, the value I create for my sellers is to help them elevate and showcase home condition. I use multiple valuation techniques to pinpoint market value for my sellers. I use cutting-edge marketing strategies to promote widespread buyer awareness and produce the maximum selling price in the fewest days possible, while protecting my seller’s best interests throughout the complete selling and settlement process. As a Buyer’s Agent, I help my buyers locate the home that changes their life. I guide my buyers in structuring the most compelling offer that can win seller acceptance, while retaining the most value and equity possible for buyer benefit and in a manner that protects their best interests throughout the complete buying and settlement process. I have worked with clients in the purchase of investment property, helping them to prospect property as well as evaluate all the financial metrics important to making the investment. My real estate experience includes working in the development, construction and operation of real estate infrastructure projects, closing over $500 million, as well as supporting several commercial real estate clients in the pursuit of reaching their objectives. My experience spans across consulting with clients on remodeling and home improvement projects to negotiating land purchase agreements and easements, to negotiating residential and commercial leases. There are few areas of real estate that I haven’t touched and it continually has been with a mind-set of delivering exceptional outcomes.