The High Price of a Home Purchase with Dale Vermillion

Aug 2, 2024

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Home mortgage rates haven’t gone through the roof in recent weeks…that’s the good news.

The bad news is that they’re already pretty high. Coupled with high home values, it’s an uphill climb for first-time home buyers. Will it get easier anytime soon? Dale Vermillion joins us today to talk about it.

Dale Vermillion is the author of Navigating the Mortgage Maze: The Simple Truth About Financing Your Home. This book covers everything you need to know about securing a mortgage—all from a biblical perspective.

Current Mortgage Rate Outlook

The rates on a 30-year fixed mortgage have been hovering around 7%, and we can expect them to stay between 6.5% and 7.25% for the remainder of this year. Analysts predict that rates may not drop to the 5% range until at least 2025 or 2026, barring any dramatic market changes.

The biggest challenge for first-time home buyers is affordability, not inventory. Despite an increase in available homes (620,000 nationwide compared to 451,000 last year), the average sales price is around $420,000. Prospective buyers must carefully budget and ensure they don’t overextend themselves financially.

Timing Your Home Purchase

Given the stable interest rates and improving inventory, now might be a better time to buy than in recent years, as long as you're financially ready. New construction starts are up, particularly in the $200,000 to $350,000 range, ideal for first-time buyers. Additionally, the post-busy season (after school starts) might offer a better buying opportunity with less competition.

Interestingly, the housing market seasonality has shifted since COVID-19. Traditionally, spring and summer were the hot buying seasons, while fall and winter were cooler. However, current market demand and population numbers have evened out these seasonal trends. Higher interest rates generally mean less competition, making it a good time to buy.

Pricing Your Home for Sale

The strategy for pricing homes has evolved. Previously, sellers would price high and negotiate down. It’s common to price lower to attract more buyers, often resulting in offers above the asking price. However, recent trends show that about 35-36% of homes sell below the asking price, indicating a shift towards more realistic listing prices.

For more guidance on navigating the complexities of buying and selling homes, check out Dale’s book, "Navigating the Mortgage Maze: The Simple Truth About Financing Your Home."

On Today’s Program, Rob Answers Listener Questions:

I have a mother who has been involved in a Publishers Clearing House scam for the last several years. My brother and I, along with the police, have tried to convince her that it is a scam, but she refuses to believe us. Recently, we were able to arrange the sale of her house and get her into an independent living situation with the ability to transition to assisted living or memory care if needed in the future. However, I have found that she has continued to participate in the scam and is giving away her retirement income each month. As her power of attorney, I am trying to save what is left of her assets for her future care. Am I doing the right thing by taking control of her finances to prevent her from being further exploited?
I have a few credit cards with Capital One and some loans, including a farm investment loan and a business loan. The interest rates on these debts are high, and I'm figuring out how to lower my monthly payments. I'm currently working with Primerica in the financial services industry, but the income from that is slow. I would like to know if I should look into a debt consolidation loan to settle my payments and make it easier to manage my debt. What would be the best approach for me in this situation?

Resources Mentioned:

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