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Week of July 17th - July 23rd

Real Estate News

No mortgage = no sale?

The reason over 35 million homeowners with a 4% or lower mortgage rate are hesitant to sell their homes is quite clear. Present-day mortgage rates are nearly double their current rates, which makes homes considerably more expensive for potential buyers. This factor significantly contributes to the low housing inventory.

Another contributing factor to the limited inventory is the reluctance of homeowners without mortgages to put their homes on the market. Surprisingly, the number of homes without mortgages almost equals the number of homes with 4% or lower rates - totaling over 37 million across the country.

Why are these mortgage-free homeowners choosing to stay put? One reason is that many of them are not facing financial distress, and thus, they have no urgent need to sell.

Additionally, events in the US banking sector over the past year have eroded confidence in the banking system, causing people to be more cautious about placing large sums of money into a bank account, which would come from selling a property.

For those who might consider pulling equity out instead of selling, the prospect of obtaining a mortgage at today's 7+% rates, along with origination fees, is causing them to hold off and wait for interest rates to decrease before considering a loan on the property. Another increasingly popular option is obtaining a home equity line of credit, especially for those seeking extra cash while preserving their existing, low mortgage rate.

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Jonathan Balog

DRE# 01980970
Broker
M: 831.747.0310
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Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.

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No mortgage = no sale?

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Jonathan Balog

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