Brandy:
It’s now time for 4 Your Money. We’re joined by James Nelson, financial advisor at Nelson Corp Wealth Management. Welcome back, James.
James Nelson:
Thanks for having me.
Brandy:
So while housing in the US still seems to be going strong, some forces are starting to create headwinds. Could you share your thoughts on that?
James Nelson:
Yeah. Most metrics are still showing pretty strong signs of real estate market here domestically. We are starting to see a few things that may be slowing a little bit. Houses are sitting on the market a little bit longer than they have been in the past. Mortgage applications have also hit a four year low. And we’ve got a chart here that shows a few of these dynamics.
James Nelson:
It looks at the average US 30-year fixed mortgage, and rates have climbed to five and a half percent from starting a year ago at 2.75%, starting the year, excuse me. So we’ve seen a pretty dramatic push here, and things have moved up pretty quickly. The other thing that’s maybe… The mortgage isn’t as surprising, the rate’s not as surprising, but the speed at which it’s climbed has been pretty surprising. So that’s the biggest thing we’re noticing right now.
Brandy:
So where do you see this dynamic having the most impact?
James Nelson:
Yeah, so usually, we don’t like to point out the most obvious things, but today I will. Home buying activity’s going to be the big item. We’re starting to see, with prices going up, mortgages over 5%. It’d be reasonable to believe that the real estate market slows down a little bit. The other thing, home builders, just in general, that dynamic, they’re going to be probably slower. There’s maybe secondary effect for home supplies if you look at whether it’s appliance manufacturers, lawn and garden, home improvement type sales, all of that stuff is probably going to slow a bit too.
Brandy:
If you missed any of our discussion, we’ll make it available for you on ourquadcities.com.