MORTGAGE NEWS & REAL ESTATE MARKET STATS

MORTGAGE NEWS: Client Scenarios

Stop Paying Someone Else’s Mortgage

In June 2020, a young woman who was renting a home with 2 friends in the Eastown area decided to stop renting and to buy a home only a few doors down from their rental. Their rent the year before was $1100 for a 3 bed 1 bath. By taking advantage of a low down payment and interest rate, she was able to buy a very similar 3 bed 1.5 bath home. Her new monthly payment, including taxes, principal ,and insurance, is $800. One of her former roommates even decided to move in and now pays her rent of $500 per month, making the new home owner’s monthly housing expense only $300—a big savings over renting, all while gaining equity.

Low Rates Mean Increased Buying Power

Despite a very competitive landscape with lowinventory, homebuyers looking to purchase in WestMichigan have never had more buying power.Recently, a young woman who, based on incomeand credit obligations, was previously pre-approved up to $250,000 at a rate of 4%. Withrates at historic lows, she is now pre-approvedup to $300,000 at a rate of 2.75%. This increasein buying power could help expand her search toareas she hasn’t yet considered, or help her buythe same house while staying within budget.

Immediate Savings Via Refinance

In July 2020, a current home owner refinancedhis home which he had purchased 2 years ago.He went from a 3.875% interest rate down to a3.125% interest rate. Due to his loan size andother factors, his monthly savings was $355 permonth—over $4,000 in the first year alone.Another borrower who used lower interest ratesto her advantage was Renee, whose interest ratewas a 5.75% and was able to refinance her loanto a new low rate of 3.625% for a savings of $285per month—over $3,000 in the first year.

REAL ESTATE MARKET STATS

This Summer’s Been Hot —And We Don’t Just Mean The Weather

At a time when the housing market would normally be slowing down, it just keeps getting hotter and hotter! Althoughinventory is limited, historically low rates have allowed buyers to stretch their dollars and has given more flexibility tofind a home that is perfect for their wants and needs. The below is a snapshot of the market from July 2020.

July 2020 Market Snapshot

New Listings: 1,211

Pending & Closed: 2159

Average Days on Market: 21 days

Average Home Sale Price: $275,923

Fun Fact: 16 Homes Sold for Over 1 Million Dollars in July

421 Manhattan Road, East Grand Rapids — Listed By Josh May with RE/MAX of Grand Rapids