What's Going on with Financing in 2023?
We're now more than 50 days into 2023, and we're still not confident how to properly interpret - let alone dissect - what exactly is going on with the economy as a whole. The stock market is showing itself to be holding rather strong, yet various industries have been bouncing up and down like basketballs. From month to month, for better and then for worse, it's nearly impossible to get a clear image of what, how, and why things are the way they are.
In the last few months alone, we've heard every story imaginable. From "we're doing great and inflation is declining", to "things look bleak, and we should expect worsening situations this year". Whether it comes from big banks or major news outlets, CEOs of major companies or from the FED itself, the messages are so mixed & mashed it seems like it's easier to just ignore things. But that's not really a healthy solution for anyone who has their best financial interests at hand, nor for anyone whose looking to finance a home, a vehicle, or even apply for a personal loan.
One very notable report is that mortgage rates are on the rise again, after a somewhat calm pre-holiday period. Back in September and October when rates were over 7%, many decided to wait for spring to buy a home or investigate financing options. Sure enough, by November things began to display signs of calming and most expected that this trend would continue on into a somewhat stable and more "normal" state. However, we now find ourselves, once again, facing complete uncertainty. The housing market saw less mortgage applications last week than any week prior in the last 28 years - the lowest level since 1995. Interest rates are jumping yet again and new mortgage applications fell by a whopping 20%.
Central bankers have signaled that rate hikes most likely aren't over and it seems that most perceive this as something that will continue or be expected throughout the summer. And still, inflation has continued to weasle it's way into nearly all aspects of our lives - at varying rates, paces, and perspectives depending on who you ask, what data you're reviewing, or what you may be buying.
One thing is for sure across the board - everything is uncertain. It's times like these when we must decide whether or not to make our purchases now, or wait things out for better pricing or financing. However, as some people had warned just months ago, these slight deviations and the seemingly slow return to normalcy may never arrive. It's up to each person to evaluate their situation, the potential that lies in the future, and where things are at now. Additionally, the importance of an item - whether small or large - should come into play. If you want and need a home, interests rates shouldn't stop you - yet who wants to buy now if they might be cut in half 6 months from now? It's a difficult situation to be in, and there isn't any surefire sign that says things will get much worse. On the other hand, nothing is showing an imminent recovery either. Are we in a good economy? A bad economy? A staggeringly fragile economy on the brink of a meltdown? Everyone has their own opinion but with so many opinions one is drawn to a conclusion that we must accept that we really don't know. What we see in front of us is not the same thing happening in other states or even other cities. We're not sure what advice to give here, other than to be prepared and get in your best financial form.
One way to be sure you're ready when the timing is right for you to buy is have your credit in order and at its best standing. That includes checking your credit score, correcting any errors, and eliminating any excessive balances so that you can show a low utilization rate. Another option is employing credit card tradelines just before you begin to apply for financing, but you don't want to just go out and buy tradelines without knowing what you're getting into. They'll help raise your credit, score, but it's temporary and requires a certain strategy.
We do our best to follow the markets, the housing industry, the credit industry, and we pay attention to what lenders are doing as well as how and what consumers are financing and how flexible they are. And today, as things stand, we stand, watching, waiting, and hoping that we'll soon be able to provide some definitive answers on how to get the best value for your money when making the most important financial decisions. Stay tuned!
Housing Affordability At Lowest Level Ever