The last 4 to 5 years in the mortgage business have been pretty sweet. Although there have been a lot of changes and new regulations, the business has been strong. With the rates at historical lows just about everyone refinanced. Well, I believe that party is just about over. It’s possible that Fannie and Freddie might loosen up their HARP requirements to allow some more refinancing to happen, but even then, with the rates rising, it might not make sense for the client.
So, where do I see the Real Estate and Mortgage Industry in the next few years, especially 2014? Although rates are rising the one thing I’m really excited about is the appreciation we have seen over the last year. In my opinion, for the Real Estate and Mortgage Industry to be successful we have to have move up buyers. With houses depreciating and so many people underwater or having lost equity, very few people were moving up. I’m starting to see this shift.
Not only am I starting to see people move up but because we have seen some equity gains I’m also starting to see people moving down. And that’s not always a bad thing. Since I graduated from college in 1986 and got in the mortgage business I have really only seen equity gains until 2007. In other words, my generation could live beyond their means. Our homes were going up in value so fast that we could either refinance and get cash-out or get an equity loan to pay off our debt. But the last 6 years have changed all that. I now believe my generation is thinking more like my parents generation. Let’s buy a home and pay the mortgage down. Lets not run the credit cards up. And that’s healthy!
So with gradual appreciation and a lesson well learned, I believe we are entering a new period. A throwback to times past. A steady, healthy mortgage and housing market. Not one built on bubbles but one built on stability. I see 2014 as the beginning of a solid housing and mortgage market. I’m excited about the prospects.
Happy New Year to everyone. Lets make 2014 a great year!