With Terry Story, 26-year Veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
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This week, veteran Florida real estate agent Terry Story talks about the impact of the Federal Reserve finally raising interest rates and how this modest 0.25% increase might impact borrowers, their ability to get mortgages, and the housing market as a whole. Fundamentally, Terry believes rates are still “so so low” by historical standards that the rate-hike impact is negligible. She believes mortgage interest rates would have to rise close to the 6% – 6.5% level before there is a sizable impact on housing. Moreover, despite super low mortgage interest rates that, if anything, should boost purchases, the housing market is currently being driven more by supply and demand, with limited supply, shortage of inventory, fewer properties for sale and rising property prices. Ideally, Terry wants to see rates rise a little because that might spur buyers to jump in before rates get beyond reach.
Terry also attributes low housing inventory to baby boomers – who own about 66% of all homes in the U.S. – and are nearing retirement, are empty nesters but are still not downsizing their homes because they’re waiting to re-build the home equity they lost in the 2008 downturn. Then add their millennial children who are still staying with their baby boomer parents… so there’s a bottleneck in homes for sale.
Terry also talks about recent feature additions on Zillow.com with tools that can help you tweak the value of your home based on the home improvements you’ve made, your home’s preferred location, etc. But while this tool is nice, you really want a knowledgeable realtor who knows what comparable properties are really selling for with upgrades and everything else.
Terry talks about what renters really look for – not the great club houses – but more contemporary needs such as high-speed Internet, walk-in closets, parking spaces, sound proof walls, in-unit washer-dryers, etc. – and a swimming pool.
Finally, Terry talks about the value of a great credit score on your borrowing rate, with discounts of 0.24% to 1.17% on your mortgage per 10 point increase in your credit score. So pay off your bills on time and do all you can to boost your credit score.