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Demanding better mortgage rates
“We deal with this just about every day,” Potter told Mortgage Professional America during a recent telephone interview. “Our clients call and say ‘I want to buy this $400,000 property and need to turn into a rental.’”
When the interest rate is cited? “They say ‘that’s ridiculous,’” Potter said. “‘I mean, it wasn’t a year ago I got 4.5%.’“
That was then. Increasingly, consumers have become more hesitant to purchase homes while the rate remains elevated. But here’s the rub, Potter agreed: In past decades, borrowers have purchased homes at substantially higher rates.
Rates were higher back in the day
Take the 1990s, for example. Rates were 10.13%, settling down to 8,06% by the end of the decade. By the time the 2000s came, rates were down to 8.06%, dropping to 5.14% by decade’s end.
“The expectation is just not realistic,” Potter said of borrowers demanding lower rates. “I think it’s going to take some time for people to realize this is the new normal. That’s what I’m saying.”
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