It's 9:30 in New York City where Wall Street is reacting to the latest inflation report yesterday the Dow fell over 500 points after CPI data showed higher than expected inflation in January it was the biggest drop for the Dow since March of 2023 Market just opened uh they are up uh about uh just a little under half a.
Percent keep watching meanwhile real estate experts predict good news for mortgage rates this year they expect them to drop from their current levels but not by much perhaps only by 1% but is that to make it worthwhile for homeowners to refinance their mortgages to help us answer that question Jessica is joining us now she's the deputy chief.
Economist and vice president of research at the National Association of Realtors so the question that we have there in the teleprompter is is 1% uh enough for uh homeowners to refinance let me tell you somebody who's just about to buy a house yeah because it's a lot of money when uh when uh interest rates drop especially if you're talking about folks.
That have jumbo loans it is so if we're talking about a $400,000 home which is the typical home price in America just about uh what you're looking at is about a $300 savings per month I think it really depends on that homeowner on how long they plan on living in that home because there's closing costs often when you do.
Refinance I'm glad you sort of brought it down to actual dollars and cents because I think that's that's the best way for people to conceptualize the difference that it makes and if $300 either way isn't going to be a big deal for you then maybe it's not worth it but sometimes $300 get is a big deal per month you know but there is a cost in.
Refinancing right that does cost somebody that there is and it's probably different depending on your bank and and that sort of thing so you have to you have to determine whether or not that cost is worth it for you as well um in your research though what are the trends that you're noticing when it comes to refinancing so rates have actually come.
Down from uh almost 8% in October of 20203 so there's actually some consumers right now who recently purchased a home in the last couple of months who actually are thinking about refinancing if you just purchased you probably are planning on staying that home for quite a while in fact our research shows about 10 to 15 years so that would make sense.
In that scenario but for people who are looking at the market right now who are trying to time it and saying um 6.6 is where rates are right now maybe they'll go down to low sixes that's still in the 6% range so you have to really calculate does it make sense right now or can I get just a little bit of savings but there could be a bidding war in the.
Future if we look at the spring market so with the cost of homes uh that are still pretty high um does the data suggest that the market needs a reset and again as amarie points out frequently when we talk about real estate uh we're in a very unique Market here in New York City New Jersey Pennsylvania Connecticut uh for the rest.
Of the country what do H how are prices I mean we hear for example in New York City that rents are skyrocketing but prices for homes are still relatively decent um and and there are a lot of people who suggest that if interest rates come down you're going to see prices go up so what we actually just saw is that.
Home prices are actually up in 85% of markets around the country um so that's actually quite a bit of home price growth we do expect that home prices are going to continue going up good news for home owners but bad for home buyers who are trying to get into the market we know that home prices are going to continue to go up because inventory is.
So tight right now regardless of what Market you're in there's very low limited housing inventory right now we really do need more building especially at affordable price points wait wait can I can I ask a question I follow up on that do we need more building or is it that homeowners are sitting on the sidelines and not willing to sell their.
Homes at this point in this interest rate environment once the interest rate environment is more uh beneficial then you're going to start to see more of a supply I think it's both things so we absolutely have a lock in effect because people actually purchased a home at 2 and 3% or they refi to that rate and so now they're very unwilling to move what.
We have to remember though is that new babies happen marriages happen divorces happen new jobs and that will cause people to move but at the same time we have been underbuilding in the US for over a decade we really do need more Home Building especially when we look at affordable property so not just mcmansions yeah we had a shortage before.
The pandemic and then the pandemic brought building down to a grinding Halt and the price of wood skyrocketed so then there was nothing happening so we got to catch up from even before the pandemic but you know the pandemic had an incredible impact on many many Industries certainly housing uh Jessica it's great talking to you thank you very.
Much thank you
The fervour rates now not compounding 10x in 1 twelve months 😂😂😂 wtf
The authorities must print extra money and have tag controls
As soon because it drops 2 factors below what I am now paying I will refinance. Or sell. Depending on what’s going on in my job and the housing market.