Jan 26, 2023
The HOP (Home Ownership Podcast), Episode 124
Hosted by Village Properties Realtor, David Charles Allen
Mortgage rate buydowns are on the rise as homebuyers cope with high interest rates.
David discusses the recent beautiful cool weather (with highs in the 60’s) and the surf swell before turning his attention to interest rates and Santa Barbara real estate stats. Interest rates remained the same, at 5% for 30-year jumbo loans and 5.75% for 30-year conforming. There were 27 new listings last week and while there was some build up in supply, the inventory is still low—ideally there would be 50-60 new listings.
The topic he discusses today is Mortgage Rate Buydowns—which are on the rise as homebuyers deal with high interest rates. In a sense, David says, they can be thought of as a price reduction. Since the market has cooled down for sellers, many are offering concessions in the form of interest rate buydowns. For example, if the seller is willing to offer a 2-1 interest rate buydown with today’s interest rate of 5.75%, the buyer’s rate would go down by 2%--to 3.75% in the first year. In the second year, the rate would drop 1%--from 5,75% to 4.75 %, before returning to the original rate or 5.75 % in year three.
Learn more about the pros and cons of Mortgage Rate Buydowns in this episode of the HOP! If you have any questions, call David Charles Allen at 805-617-9311 or email firstname.lastname@example.org