Mary Beth: Hi, this is Mary Beth Harrison with Dallas Native Voice, and I’m sitting here with Jason Browning with Academy Mortgage. And things are so volatile right now. Rates are down and then they jump up a little bit and they jump down a little bit. It’s incremental, but it’s there.
Jason Browning: It is there. It’s noticeable and it gets your attention, especially if you’re not locked in, it definitely would get your attention.
Mary Beth: It definitely does. And so, I have some clients that go, “Oh, I’ll just wait. We won’t do this right now.” And I’m just curious, what is the cost of waiting?
Jason Browning: Well, if you look at it per thousand dollars, right?
Mary Beth: Right.
Jason Browning: You’re going to look at about $4,000… Excuse me. If it was $4,000 you might forget. It’s $4 per thousand, if you were to look at it that way, that’s… I mean, it’s really a cup of coffee that you’re talking about per $1,000.
Mary Beth: So, on a loan when I’m… Let’s just say $100,000. let’s just make that easy. So your payment principal and interest would be approximately, not exactly, but somewhere in the four hundreds a month.
Jason Browning: Correct.
Mary Beth: Just principle and interest, not taxes and insurance and all the rest, but just that. So when I see a buyer and seller arguing over a couple of thousand dollars, it’s like, “Really? It’s $8 a month to you. Do you want this house or not?” There’s something to weigh it on.
Jason Browning: Well, absolutely. And then if you have someone that’s actually watching and coaching on the bond market, I mean, you could really absorb that with making sure you’re locking in at the right time as well.
Mary Beth: Right. So if that person that was going to buy the $100,000 house was decided, “Okay, you know what, I’m just going to wait. I’m going to wait and see if rates go down or I’m going to see if prices go down,” or whatever. Well, we realize prices are not going down.
Jason Browning: Right. In this market, they’re definitely not going down.
Mary Beth: No. And year over year, Dallas has been a really perfect appreciation graph because we just have been a steady climb year over year, somewhere around a 6% increase appreciation, every year. I just met with clients that we sold them their home in 2017, and their home is worth $50,000 more than it was when they bought it.
Jason Browning: Right.
Mary Beth: I mean, where else did you make that much money in such a short period of time?
Jason Browning: Bitcoin would be about the only thing that I would say has done that.
Mary Beth: Yeah, right.
Jason Browning: It’s just crazy.
Mary Beth: Yeah. Even investments aren’t jumping up that much. So the cost of waiting in that particular house, for example, if they had bought it in 2017, they would have bought it for $300,000 and today they’re going to buy it for $350,000.
Jason Browning: Correct.
Mary Beth: And then on top of that, interest rates as they continue to fluctuate and they’re not going to always stay this way.
Jason Browning: Absolutely.
Mary Beth: I mean, at some point we’re going to start to see them go up. Even as they jump up to say a 4% as opposed to a 3 point whatever it is right now, 7, 8 or whatever, it’s going to cost them more money for the same house. And in some instances it’s pricing some of our clients out of the market completely.
Jason Browning: That’s a very good point. I mean, you really could, if you waited five months, three months, you literally can take down your cost of buying, considerably, by just waiting that short period of time.
Mary Beth: Right. Well, and put on top of that, you decide to go buy a car or you decide to go buy furniture or you decide to go take out a loan for whatever, and now you’ve messed with your credit rating as well.
Jason Browning: That’s true.
Mary Beth: And so the cost of waiting can start to get pretty, pretty high.
Jason Browning: Yes, I mean, just normal life events could affect that waiting period for sure.
Mary Beth: Right. I love the idea that for $4 a month, the increments of $1,000 on your payment, I mean, on your loan amount, I guess it would be, equals to about $4 a month for every thousand. You’re going to blow that at the movies, at Starbucks. I don’t even think you could go to a movie for $4.
Jason Browning: Oh, no.
Mary Beth: So let’s take that off the table. Can you even go to Starbucks for $4 any more?
Jason Browning: I don’t even know any more if you can get something out of there for $4.
Mary Beth: So wait, should we buy a house or should we have some Starbucks? Is that what we’re talking about here?
Jason Browning: Yes.
Mary Beth: Kind of sounds like it. All right, well it’s probably time to start looking for a house, don’t you think?
Jason Browning: Yes ma’am.
Mary Beth: It sounds like it to me too. Well, if you want any more information about that, you can always reach Jason with Academy Mortgage and you can find us on all of the social media. We go where you go, and you can find us at dallasnative.com. Thanks for listening.