Salt Lake City and its surrounding suburbs are some of the hottest real estate markets in the country. Since the Covid-19 pandemic started, nearly 5,000 Americans have moved into the city. Over 26 months, the city's population grew by 2.5%.
This comes as no surprise, given the characteristics of Salt Lake County. The area is beautiful; there are so many outdoor activities, and economic opportunity is aplenty.
Now may be the best time to buy property in Salt Lake County. Median home prices are down 6.5% from 2022.
Read on to learn about real estate financing in a challenging market. Explore financing tips that the best real estate investors use to stay active.
Cash Is King
With the 30-year mortgage rate back over 7%, most buyers understand that cash is king. As mortgage rates increase, the buyer's purchasing power is diminished. A greater proportion of their monthly payments go towards interest instead of principal.
Here are a few tips to fight back against high interest rates. You should put down as much capital as possible towards the down payment. This will minimize the size of the home loan that you need to take out.
With inflation so high, you may consider liquidating other assets. This will create additional capital that you can use to increase buying power.
Follow the Rates Market
Mortgage rates are not historically high. In fact, a 7% rate on a 30-year mortgage is lower than it was in the 1970s through the early 2000s. Consumers simply got used to the low rates starting in the period following the Great Recession of 2009.
The good news for buyers is that economists expect mortgage rates to fall in 2024 and 2025. Experts believe the U.S. Federal Reserve will slash rates multiple times in 2024.
It is important to follow the news cycle and stay in touch with your mortgage broker. You can take advantage of favorable news and lock in a more competitive rate.
Porting a Mortgage
Many buyers express interest in keeping their current rate. Porting a mortgage is an increasingly popular way to do this. However, many buyers have never heard of the process.
The way it works is that you use the proceeds from a house sale to pay off your existing mortgage. Then, the lender extends your current terms to cover the remaining cost of the new home.
While this sounds like a good deal, this type of mortgage is not widely available. Some lenders will reject your attempt to port the mortgage. You should review your existing terms and conditions to see if porting is an option.
Your Guide to Real Estate Financing
Many buyers are eager to act in the Salt Lake City region. Prices are down, and the city has never been hotter.
However, high interest rates are providing a strong headwind in the real estate market. A property management company like PMI Wasatch Front has experience navigating difficult real estate markets. If you have questions about real estate financing, contact us at PMI Wasatch Front to speak with an expert today.
