Getting Comfortable with the New Normal Mortgage Rates

The biggest shock to homebuyers is the soaring mortgage rates of 2022 that doubled in one year resulting in approximately 15 million mortgage ready buyers displaced from the market due to affordability issues.

As of February 23, 2023, the 30-year fixed rate mortgage was at 6.5%.  While that is twice as high as it was on January 6, 2022, it is still lower than the 7.75% average rate since April 2, 1971, according to the Freddie Mac Primary Mortgage Market Survey.

When rates increase at a rapid pace like this, it takes time for the public to adjust and begin to accept it as the new normal.

Prior to the housing bust that led to the Great Recession, the normal for mortgage rates was in the 6% range and existing home sales were over 6.5 million for three years.  From 2007 to 2014, home sales were closer to 5 million with 2008-2011 at just above 4 million annually.

From January 17, 2008 to March 5, 2020, mortgage rates averaged 4.32%.  In this 12-year period, buyers experienced some of the lowest mortgage rates ever and became to expect that rates would always be that low.  

Then, during the hardest part of the pandemic, the government took unprecedented actions to influence rates even lower to where they averaged 3.06% between March 5, 2020 and March 17, 2022.

It appears that mortgage rates have peaked in this latest cycle.  In December 2022, the rates came down for four straight weeks following two weeks of slightly higher rates.  The question is what to anticipate for 2023.

The National Association of REALTORS® is expecting mortgage rates to be below 6% in the last half of 2023 possibly, 5.5% to 5.7%.  Zillow's chief economist believes rates will drop to around 5.5% for 2023.  The Mortgage Bankers Association expects that "30-year mortgage rates will end 2023 at 5.3%."  Fannie Mae forecasts rates will end 2023 at 5.7%.

Relying on the experts, rates are not going to return to the unusual levels during the pandemic or even in the past 12-14 years.  The new normal may well indeed be at the mid-5% level and when the public gets use to it, sales will begin to rise again.

Some buyers may need to adjust their price points because higher payments are directly impacted by the higher rates.  Even if they could have afforded more with the lower rates, that was a missed opportunity.  When the Fed gets inflation under control and the market rebounds from the pent-up demand, another window could be lost.

David Stevens, CEO of Mountain Lake Consulting, and former Assistant Secretary of Housing recently said in a LinkedIn post talking about the housing market in 2023 "So be advised...this may be the one and only window for the next few years to get into a buyers' market. And remember...as the Federal Reserve data shows...home prices only go up and always recover from recessions no matter how mild or severe.  Long term homeowners should view this market...right now...as a unique buying opportunity."

Vikki Crossland and Brandi Cook, CRS, ABR, SRES Meybohm Real Estate 142 Laurens ST NW Aiken, SC 29801 (803) 645-8008 info@aikenhomes.com www.aikenhomes.com BetterHomeowners.com/VikkiCrosslandBrandiCook Helping homeowners when they buy, sell and all the years in between.

Augusta, GA + North Augusta, SC's Public Murals

Did you know that Augusta, GA (located right across the river from Aiken, SC) is nicknamed "The Garden City". Beautiful flowers and hand drawn outdoor art murals cover the city. You simply just have to slow down and take a look. In this video we will give you some hints on where to find some of these colorful murals.

Have you ever visited Augusta for the Masters golf tournament or any other event that Augusta offers? If you happen to arrive by airplane the "Greetings from Augusta, Georgia" has been there to greet you! This mural was painted by children's book illustrator, Dawn Cardona.  Dawn is known for her vintage style. Located at 1501 Aviation Way Augusta, GA 30906

The RESPECT mural which is located at 601 7th Street, more commonly      known as the James Brown Arena. The mural was painted by Jason Craig, a local artist. Jason has painted many of the murals that you see around the Augusta area. The powerful RESPECT mural has lots of iconic images that represent what Augusta, GA means to the locals. Located at 601 7th street Augusta, GA 30901

If you are on the river side at the intersection of Reynolds and 12th street you will see stairs leading down to the river.  The colorful INNOVATION mural is painted there. Aort Reed is the artist of this mural depicting Augusta's very own Sharon Jones. Located at 100 Grace Harper Lane Augusta, GA 30901

Our last mural pick in the Augusta area is the Harrisburg Biome 1 and 2 murals located in the Harrisburg neighborhood. These two murals were painted by husband and wife, Wes and Colleen Beyer Stewart. Harrisburg Biome 1 is located on the Calhoun Expressway underpass on the north side of Crawford Avenue. Harrisburg Biome 2 is located on the Calhoun Expressway underpass on Eve Street. The vibrant flowers really come alive as you drive pass. Located at Crawford Avenue underpass

There are many more murals located both indoors and outdoors around the city. Comment below if you can find them!

If you are heading back into Aiken to find your dream home make sure to stop at this mural located right across the river inside SRP Park. SRP Park is home to the Augusta GreenJackets baseball team. The Auggie Wings mural painted by April Henry King is a must to "get your wings" before grabbing a beer and baseball game. Located at 187 Railroad Avenue North Augusta, SC 29841

Before you head home after a long day of mural searching swing by the Sno-Cap Drive. The Sno-Cap is a 1960's inspired restaurant. Don't be surprised if you add one more must see mural to your list!  April Henry King also painted the Sno-Cap Drive Inn mural to depict a classic American moment in time.                                                              Located at 618 West Avenue, North Augusta, SC 29841

We hope you have enjoyed some of our favorite murals in the Augusta/North Augusta area. If you enjoy searching for hidden gems, we also made a video about Aiken's outdoor mural scene! Make sure to hit the subscribe button for our next video!

Remember, it’s a big decision we know… And we are here to help. It's your home, your lifestyle, and we want to be your real estate team.

 

Brandi Cook + Vikki Crossland

Meybohm Real Estate

 

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MEET THE TEAM: Joy Lindell- Buyer Specialist Aiken, SC

Taking a little timeout this Tuesday to introduce one of our newest team members, Joy Lindell. Joy is ready to help you find your next home or investment property!

Brandi Cook + Vikki Crossland

803-645-3325

Meybohm Real Estate

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When do you lock your mortgage rate?

 

Locking your interest rate protects you from increases due to market conditions.  Locking early safeguards your budgeted payment.  By locking the rate, if the market goes up, you get the lower rate; if it goes down after the lock, you may be able to pay a fee and lower the rate. Knowing when to take the lock is determined by which direction you think the market is going.  If you think rates are going up, lock in early.  If you think rates are going down, ride the rate to within a few days of closing. Some lenders may allow a borrower to lock a rate after pre-approval but is more common to not offer a lock until there is a signed contract on a home.  Even with a pre-approval, it could easily take 30 days or more to close a transaction and the rates can move a lot in that period. There may be a fee charged to lock a rate which is determined by the lender.  Generally, the longer the time for the rate lock, the higher the fee. There is a lock period established by the lender that guarantees the rate, if the loan is closed by the expiration date.  Normal lock periods can be between 30 to 60 days.  Longer periods may be available but will probably require higher fees. Things that could affect your rate lock are: The appraised value comes in lower than what was expected in the sales contract. The borrowers' credit changes considerably before the closing. The loan amount changes after the rate lock. The loan type changes. The down payment decreases before the closing. Some income, like bonuses or overtime, could not be verified. If a higher rate at closing means that you will no longer be able to qualify for the mortgage, it may be more important to lock in early.  Looking at what the rates have done for the preceding weeks may indicate a trend but at the same time, markets have turned overnight and started moving in the opposite direction. A trusted mortgage professional can give you good advice and why they feel you should either lock the rate or let it ride.  Your real estate agent can help also but ultimately, the decision is yours.

Vikki Crossland and Brandi Cook, CRS, ABR, SRES Meybohm Real Estate 142 Laurens ST NW Aiken, SC 29801 (803) 645-8008 info@aikenhomes.com www.aikenhomes.com BetterHomeowners.com/VikkiCrosslandBrandiCook Helping homeowners when they buy, sell and all the years in between.

5 Places to Visit in Aiken, SC

Considering a visit or move to Aiken? Even a local looking for something to do in Aiken, SC? 

A great way to get to know a community culture and vibe is seek out some of its history.

Stay tuned for 5 places to visit that tells you a lot about Aiken, SC.

 

One of best ways to understand a town is to go back in history. Aiken, SC was highly influenced by a train, winter colony, equine culture, Savannah River Site and of course the original Aikenites. All, made Aiken what it is today and is still shaping its future.

 

Our first stop back in history, is literally Aiken Train Depot.

Aiken Train Museum 

406 Park Avenue SE

Aiken, SC 29801

It’s been said Aiken owes their existence to South Carolina Railroad. The train coming to Aiken is recognizably one of the biggest influences on Aiken, SC. In fact, it is named after William Aiken, the president of the South Carolina Railroad. The museum has nine dioramas that depict the towns along the original SC canal and Railroad Company right of way. It’s an enjoyable museum, that has restored railroad cars and is one of Aiken’s visitor centers.  

 

Our second stop is…

Aiken County Historical Museum 

433 Newberry Street SW

Aiken, SC 29801

Some say Aiken got its personality from the past “winter colony” of wealthy northern sports enthusiasts. Let’s start at Aiken County Historical Museum; the museum is history itself being a 1930’s winter colony mansion name “Banksia”.  This museum is a very special place. It’s not just the building, serpentine walls and setting, but the wealth of information and history held within her. The museum collects and preserves historical material relating to Aiken County. There is a lot of fascinating info on the winter colony culture. This is one of the numerous reasons Aiken is so attractive to so many.

 

Let’s Continue on our journey to:

Savannah River Site Museum

224 Lauren's Street SW

Aiken, SC 29801

Aiken’s relatively cosmopolitan spirit is owed to the Savannah River Site, with all the technology, businesses, and people it brought to the area, way back in 1950’s.

The Savannah River Site Museum is dedicated to bringing the stories of Savannah River Site, its scientific and technological role in the Cold War, to life. An ideal place to learn to about SRS which still the largest employers and still shaping Aiken and the CSRA today.

 

We are now at our 4^th Museum.

The Center for African America History, Art and Culture

120 York Street NE

Aiken, SC  29801

This museum is housed in the historical Immanuel Institute built by Reverend W.R. Coles, an African American Presbyterian missionary in 1889.  Rev. Coles moved to Aiken in 1881 and established a church and school for freed enslaved people. The museum is operated by the City of Aiken and is an educational resource with interactive programs of sight and sound that educates and inspires all.

 

Our final stop today is

Aiken Thoroughbred Racing Hall of Fame and Museum 

135 Dupree Place

Aiken, SC 29801

There is no doubt the equine industry has a huge financial impact on Aiken, now and over the decades. Aiken is known as one of the best training places. Horse people from all over the world come to Aiken; many just cannot leave this slice of heaven. This museum which is located within Hopelands Gardens was established in 1977 as a tribute to the famous flat racing and steeplechase Thoroughbred horses that trained in Aiken, South Carolina. Even though a small museum its rich in history and information. Afterwards, take some time to enjoy a walk in the famous Hopelands Gardens.

 

Now that you just took a tour of Aiken’s history and past, each shaping Aiken to become this quaint, vibrant, cultured town it is today….it’s time to plan a visit. Now be careful, you may want to make Aiken, SC your home;  just like I did over 40 years ago. 

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Brandi Cook + Vikki Crossland

Meybohm Real Estate

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Get the Buyer Incentives to Act Now

 

Sellers, who last year, were not willing to make any concessions, are much more likely to do so this year due to the softening of the market because of inflation and higher mortgage rates affecting affordability for buyers. Concessions can take place in different forms.  A seller could offer to pay the buyer's closing costs or pay points for the buyer to get an FHA or VA loan.  Another option would be to pay for a 2/1 buydown that would lower the buyer's payments in the first two years of the mortgage. Buydowns can be temporary or permanent and are achieved by pre-paying the interest at the time of closing.  Typically, the seller will do this as an inducement to the buyer.  While individual lenders set the price for permanent buydowns, a common rule-of-thumb would be two points, or two percent of the mortgage amount, to buydown the rate 0.5% for the life of the mortgage. A more common type of buydown is a 2/1 where the payment is calculated at 2% lower than the note rate for the first year and 1% lower for the second year.  The third and following years, the payment would be calculated at the note rate. $400,000 Purchase Price, 80% loan-to-value @6.27% for 30 years  Cost of buydown - $8,099     1st year 2nd year Remainder Payment Rate 4.27% 5.27% 6.27% P&I Payments $1,775 $1,992 $2,221 Monthly Savings $446 $229     In the example above, the seller would pre-pay the interest on the buyer's mortgage for the first two years to subsidize the difference in the note rate and the payment rate. A 2/1 buydown is a fixed interest rate mortgage where the buyer must qualify at the note rate.  It is a standard, conforming loan and applies to FHA, VA, or conventional.  The benefit is that the buyer will have lower payments for the first two years which can help them settle into the home and not exhaust their resources initially. Closing costs and pre-paid items are commonly included in seller-paid incentives for the buyer.  Many times, they are described in the listing and/or sales agreement as "Seller to pay up to $X,000 in closing costs or pre-paid items on behalf of the buyer." The benefit to the buyer is that less money is needed to close the loan.  Lenders are agreeable to this type of provision if it is stated in the sales contract. Car dealers have been providing incentives in the form of upgrades, below market interest rates, pre-paid regular service for a period, and other things to incentivize a buyer to purchase now.  It is also common practice for new home builders to do the same. In the resale home market, while these things have been done in the past, there wasn't a need for sellers to incur the additional expenses with such a short supply of homes.  The market certainly changed in 2022 with fewer qualified buyers in the market due to the higher interest rates.  Now, sellers are starting to offer incentives but regardless, buyers can include the incentives in a sales contract for the seller to consider. Your agent will be able to help you understand what things are common in your market to help with some of the concerns facing buyers today.

Vikki Crossland and Brandi Cook, CRS, ABR, SRES Meybohm Real Estate 142 Laurens ST NW Aiken, SC 29801 (803) 645-3325 info@aikenhomes.com www.aikenhomes.com BetterHomeowners.com/VikkiCrosslandBrandiCook Helping homeowners when they buy, sell and all the years in between.

Why Horses + Locals Love Aiken Horse Park- Aiken, SC

When you think Aiken, do you think horses? Most people do and some of those people aren’t riders but horse events are a spectator’s sport and Aiken Horse Park at Bruce’s Field wants EVERYONE to know that. Most of the events at the park are free and you’re welcome to come in park, walk around and enjoy one of Aiken’s treasure troves. This week Brandi + Vikki are joined by Tara Bostwick, COO of Aiken Horse Park to let you in on all this legendary horse property has to offer. For more info and upcoming events visit https://aikenhorsepark.org/

 

Make sure you are subscribed and following our YouTube + social media accounts to stay up to date with all the latest real estate + CSRA (Central Savannah River Area) happenings!

 

It’s a big decision, we know. We’re here to help! It’s your home, your lifestyle and we are your real estate team.

 

Brandi Cook + Vikki Crossland

Meybohm Real Estate

 

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Hitchcock Woods New Gateway, NEW Outdoor Activities in Aiken, SC

Brandi and I are here on the corner of South Boundary Avenue and Laurens Street, stay with us to see the newest open greenspace just opened up here in Aiken, SC.

A major new green space called” Gateway to Hitchcock Woods” just opened to the public in December 2022.This new green space will increase visibility and accessibility to one of Aiken’s most significant natural assets – the Hitchcock Woods and solved an existing problem too.

Aiken Land Conversancy and the community were excited about this project since its not only new greenspace for the public to enjoy, but also the additional benefit of addressing the environmental issues from stormwater runoff. The project is the first of its kind in South Carolina and the black iron gateway gives way to more open space at the corner of Laurens and South Boundary. This was the solution to a long-term problem that actually went into the Hitchcock Woods and created a lot of problems for the woods. There are tanks that lie underneath the green space. It is all to control the stormwater and reduce erosion for one of Aiken’s major assets.

The price tag on this project totals out to be over $15 million dollars. There were a lot of others who supported and gave input to this project. The Aiken Land Conservancy and Streetscapes (a private foundation devoted to protecting Aiken’s trees) have participated in the creation of the landscape plan for this site and provided funding.

The cool feature of this project…. there will be educational “way stations” along the walkways at this site and are currently being developed. Funding from the Hitchcock Woods Foundation facilitated the addition of this expertise to the project team.

It is wonderful to see our city, private foundations and the community pull together for a positive outcome to solve a problem together.

 

We see this as a team effort taking care of Aiken’s natural environment while correcting problems that developed in time and growth of our community. Resulting in establishing a new beautiful green space for the Aiken community that locals and visitors can enjoy that increases visibility and accessibility to one of Aiken’s most significant natural assets… Hitchcock Woods!

 

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Brandi Cook + Vikki Crossland

Meybohm Real Estate

 

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