Navigating Loans in Today’s Market

The spring market is here, and inventory is still lower than we would like to see. So far, we’re seeing similar patterns to what we’ve seen in the past. There are more buyers than sellers, causing multiple offers on a property, often over list price and often waiving all contingencies. So, what are we doing to help our buyers get their offer accepted? At Fairway, we have many programs to help buyers get their offer accepted, but the main tools are the Proof of Funds program and the Fairway Cash Guarantee.  These programs allow our buyers to compete with cash offers in a competitive market.

In addition to the Proof of Funds program and the Fairway Cash Guarantee®, we also have many options for first-time homebuyers. For example, on Conventional loans, there is a $2,500 incentive for down payment assistance.  WHEDA is also a great option for many first-time homebuyers because of their low interest rates and down payment assistance. If you would like to learn more about these programs, please contact your favorite local Fairway loan officer, and they’ll be happy to help.

Interest rates have come down from their high point in October 2023. They’re still higher than most would like but have come down a lot thanks to inflation cooling down. As I’m writing this article, we found that the Consumer Price Index numbers for January came in higher than experts were predicting. Many experts were expecting the Federal Reserve to start cutting interest rates in March or certainly when they meet in May, but now that might be pushed closer to the summer or fall. We also have the presidential election happening in November, which usually causes interest rates to go down. We anticipate rates will be lower at the end of the year, but we are advising customers to purchase now if they can because the cost of waiting can be huge. We are fortunate to live in an area that has seen continued home appreciation, and by waiting for rates to come down, buyers might be costing themselves a lot of money.

The fact that you are reading this tells me you have stayed in the real estate industry, which is great! 2023 was a difficult year for some lenders and agents. Many of us are happy that 2023 is in the rearview mirror, and we are anticipating a better market in 2024. From a lender perspective, we have seen many competitors leave the business and go into something else. I have seen this a few times over my career and refer to it as a “thinning of the herd.” It is not a fun thing to go through, but it is part of this business. Hoping 2024 and future years will be better for all of us.

Mike Lenz marketing photo

Michael D. Lenz (NMLS #631968)
Branch Manager, Fairway Independent Mortgage Corporation (NMLS #2289)
4750 S Biltmore Lane | Madison, WI 53718
Office: (608) 318-4280 Cell: (608) 228-7252