The mortgage industry is undergoing changes significant enough to motivate those who have been sitting on the sidelines to do something now, as well as inciting those who didn’t act when the rates were low. Global events serve as a call to action and affect how we perceive the causes of inflation. Whether it’s the raising of interest rates by the Fed, major court decisions, government investigations, or health issues, the constant barrage of news from every sector affects inflation and also influences the decision to buy a house in such an economic climate. The war in Ukraine has resulted in higher food prices due to its being one of the world’s biggest grain suppliers, and as Russia has commandeered those resources, it is no longer able to supply that grain. Since grain is in the majority of foods on grocery store shelves, when grain prices go up as a result of scarcity and from having to source it elsewhere, food prices follow.
Covid has also contributed to inflation in several different ways, through supply chain issues and wage inflation. Paying people more is a good thing, but the ripple effects can be burdensome, and employers across all industries have to turn around and pass on those wage increases in the form of higher costs to consumers if they are to keep their businesses profitable.
People are finding they have less home-buying power now compared to the beginning of the year, coupled with mortgage interest rates rising exponentially and fewer properties on the market. Price increases of 20 percent year over year are also a form of inflation, adding to the myriad of other forms already present throughout the economy. Will all of these inflationary factors prove to be a deterrent to most prospective homebuyers, or spur them to act before more changes appear on the horizon? Jeff’s guests include:
– Josh Thompson (Malibu Funding) discusses licensing and permitting for developers.
– Mike Chapman (Chapman Real Estate) talks about appraisal differentials.
– Charles Giscombe (Malibu Funding) delineates the types of documents buyers must produce for their loan applications.
