S1 E15: How is this economy affecting mortgages and housing?
Branch NMLS number 33041 Rick Ripma’s NMLS number is 664589. Ian Arnold’s NMLS number is 1995469 equal housing opportunity some restrictions apply.
Advisors Mortgage Group is proud to present Indy’s Real Estate Gurus hosted by Rick Ripma, the hard working mortgage guy, please contact Rick for all of your mortgage needs at HardWorkingMortgageGuy.com That’s HardWorkingMortgageGuy.com. Now, here’s the hard working mortgage guy, Rick Ripma.
Rick Ripma 0:40
Welcome to Indy’s Real Estate Gurus. We appreciate you joining us. This is Rick Ripma, your hard working mortgage guy and this is Ian Arnold with Advisors Mortgage Group. I want to talk about the APR real estate market along with a little bit on interest rates, we’re also going to get into how today’s economy is going to affect home purchases and mortgages. But to start, we’re going to do a recap. This is from MIBOR the Metropolitan Indianapolis Board of Realtors, it’s for the major metropolitan Indianapolis area. It’s not through the entire state, but it covers most of the state. And the rest of the state is in kind of harmony with this. So I think we’re in pretty good shape. First, let’s talk about the median sales price, the median sales price month over month, so March to April went up 3.8%. That to $275,000. Now that’s the median price, it doesn’t mean that your home appreciated 3.8% just means that more expensive homes sold than the month before and obviously has a little bit to do with our value increases, but not exactly. It isn’t exact, you know, oh, my home went up. Also, close sales for April were up 5.6%. So the price was up 3.8%. close sales were up 5.6% to 2987. And that’s a pretty big number in Yeah,
Ian Arnold 2:16
I mean, but it’s basically what we talked about last month, when we went through this we saw there was gonna be an increase when it hits springtime. Because people are wanting to move now. I mean, for instance, my kids are out of school next week. So guess what, if I wanted to move now, this would be the time to start going.
Rick Ripma 2:35
Yeah, because then you can get into your house and get everybody settled before school starts again. And I was looking at the school calendars. And one of them. They get out on the 27th of this month. And they start about the 10th of August. Is that about the time your Yeah,
Ian Arnold 2:50
my kids go out this week, and then they start on August 5.
Rick Ripma 2:53
Okay. Yeah. So it’s right in that timeframe. That’s about two and a half months that they’re off. And so many people want to start there. They want to start the school year, they don’t want to move their kids during the year they want to move them at the start of having started with the rest of the kids. You know, along with that. We have the year-to-date sales, we have 10,318 year-to-date sales for the four months, and we had 12,520 year-to-date residential listings. So that gives us a current inventory active inventory of 1979 homes. Now that sounds like a lot of homes. But when you start splitting it up by price range and areas, there really aren’t that many homes out there. No, not even close. I remember seeing back when I was a new home sales, there would be 12,000 homes available. And even new homes under construction, it was a much bigger number. This number is incredible to me. It was already low. But the average number of days on market for April was 15 days.
Ian Arnold 4:10
Yeah. And when you look at that 15 days, we dropped in one month, it dropped four days. That is crazy. So like we said even last month if you’re not ready if you’re not jumping in soon as that house is listed on the market and jumping in there to see that day that not the next day, you’re probably going to be out of luck.
Rick Ripma 4:28
Yeah, all these numbers, every single one of these numbers is saying that if you’re going to go looking at homes, you have to be ready to make an offer. And it’s exactly what we’re seeing when we talk to the real estate agents, you know, in the pre-approvals that we’re doing in the purchase agreements that we’re getting, they say that if you see a home you want, you better send an offer in right away. Do not hesitate. And there’s it’s really tough on people who are just starting because that’s a hard thing to do when you’re spending that much money to just go and say, okay, I like this house, I want to buy this house. Because you don’t want buyer’s remorse. You don’t want all those other issues. And it’s a tough situation for people. But it is the reality. If you don’t, you’re not going to get the house.
Ian Arnold 5:15
No, I mean, to say, oh, let’s think about it tonight. Yeah, that doesn’t work that might work in the car business, and we’re gonna go buy a car. But right now, in the housing market, that is not working,
Rick Ripma 5:27
I don’t even think it’s working on cars. My son wanted to buy a car. And he’s put it on hold because he has in dire need of buying another car. But he went and he found a car and drove it. He wanted to think about it. And then he decided, Okay, I’m gonna go buy it, it was sold. I mean, there’s just no inventory, most of what you’re buying is on its way in its are being built or scheduled to be built.
Ian Arnold 5:55
Especially when it comes to new cars, new cars, with that chip shortage, and you can’t find anything.
Rick Ripma 6:00
Right, it’s devastating. The month’s inventory is .7, which means that for what we have, it only takes .7 of a month to sell every house that we have on the market. That’s crazy.
Ian Arnold 6:16
Looking at it that way. So, .7 for the whole entire market and houses are selling in 15 days. So if you look at it, all the houses on the market, and what that’s roughly new listings is 3800. So almost half, a little over half of those are gonna be gone in 15 days. That’s crazy.
Rick Ripma 6:37
It is crazy. Mortgages have gone up, rates have gone up a little bit, the average back in April was, you know, somewhere in the low to mid fives every day, it’s so it’s such a hard thing to know what rates are going to be the best thing with rates is to, you know, go to HardWorkingMortgageGuy.com HardWorkingMortgageGuy.com. And go there. If you want to know what rates are you got all our contact information, get a hold of us Ian and I will you know if we don’t answer we’ll try. If you send us an email, we’ll get right back to you. We’ll do the best we can. And we’ll go through get your information. And that’s really the only way to know what rates are. But until you lock the rate, you just don’t know. And we’ll probably give a little bit more update on rates here in a little bit. But what about the actives and solds?
Ian Arnold 7:26
So like you said when we’re looking at the active to sold. And so the solds, I will say this right now are far outweighing the active right now. So I mean, again, like we’ve been saying the sales, but here’s where the main range is where it is, is most, the average is between $200,000 to $299,000. That’s just where Indiana usually stays. And that’s the middle ground. Most of the houses are selling are anywhere between $100.000 to about $400,000. And then you start getting to the outliers. I mean, so for instance, Tony Stewart’s house is like 47 million or something, a bunch of that one’s probably still on the market. So if you have that, go ahead and find it. But it’s I mean, but the mass majority of houses in Indiana right now are selling between that $200,000 to $300,000. Mark.
Rick Ripma 8:22
That sounds like about $400,000, that’s kind of our sweet spot. Yeah. But you know, I’m noticing higher and higher-priced homes, and you can tell that our prices have gone up, because conventionally, FHA, all raise their lending limits. Our conventional lending limit is almost $647,200. It is, it’s way up there. And that means you can buy so much more houses conventionally, FHA is way up. So these numbers are much higher than they have in the past because prices have gone up. The other piece of this is that when you’re looking at all this, you’re realizing that you really need to you’re if you’re going to go look at homes, you’re going to need to be prepared. So what is the first thing you need to do to get prepared? “You need a pre-approval letter?” Absolutely. That is the very first thing every agent I talked to every realtor I talked to tells me the same thing. That’s what they want, they need a pre-approval letter. So if you’re thinking about going to look at homes, even before you go look at them, you need to get with us HardWorkingMortgageGuys.com That’s HardWorkingMortgageGuys.com get our information from there, give us a call, send us an email, send us a message. And we will get back to you. We’ll run through the information. We have to get a lot of information to be able to provide a pre-approval letter. But even before we do the pre-approval letter, we want to talk about it and get an idea of what you’re after and what you’re trying to accomplish so that we can help you get there. For some people there’s work that needs to be done to get to that point sometimes There’s not enough money saved, or how can they come up with the money, or there are credit issues, some people, there’s nothing that’s there ready to go, everything looks great. So, it just really is worth going to HardWorkingMortgageGuys.com and contacting us. The other piece of this, I thought was interesting. You know, we talked about the four days, we dropped four days from March two to April on your days on the market. But the new listings, the new listings went up some. In March, we had 3618 new listings. And in April, we had 3870 new listings, that’s 7%. And the pending sales went up also, but they only went up 4.6%. So we actually should have a few more houses on the market today.
When you say few you actually do mean a few.
Because of the time of the year all, that’s expected and there are more buyers on the market. So it’s going to be interesting to see how this plays out. For our May numbers that we get in June, we’ll have to be interesting to go over those numbers. And those were kind of the biggest issue or the biggest thing I wanted to go over on the market you know before we get into the how the economy what’s going on in the economy, what’s going on what’s affecting mortgages and our in our markets. We’re gonna go to break and after the break, we’ll talk about today’s economy.
NMLS number 33041 Rick Ripma’s NMLS number 664589 equal housing opportunity some restrictions apply?
Are you someone who has not yet refinanced? Well, interest rates are at an all-time low. Good news. It’s not too late. Call me Hi, this is Rick Ripma your hard working mortgage guy at Advisors Mortgage Group, you’ve heard me on freedom 95 for nearly a decade now, I believe in freedom and I believe in you having the lowest mortgage payment possible with fast turnaround times. This could mean extra savings in your pocket soon, call me at 317215 7600 and we can get you locked in while the rates are still low 317-215-7600 or visit hardworking mortgage guy.com.
Brought to you by advisors Mortgage Group where we believe the more you know about financing a home the less stressful buying and refinancing will be
Rick Ripma 13:22
Welcome back and thank you for joining us. This is Indy’s Real Estate Gurus. And I’m Rick Ripma, your Hard Working Mortgage Guy and I’m Ian Arnold with Advisors Mortgage Group. And we really appreciate you being here today and listening. If you have any questions, you want to talk to us, you have anything you’d like to discuss, or you just want us to discuss something on the radio, please go to HardWorkingMortgageGuys.com That’s HardWorkingMortgageGuys.com. And let us know and we will do our best to answer your questions and hopefully put it on air. And now it’s time for our question of the week.
Ian Arnold 13:55
The question of the week is sponsored by debt crusher mortgage, relieving financial stress that comes with life. If you have a mortgage or own your own house, contact the experts at Debt Crusher mortgage.com To have them put together a free savings report for you. So the last question was I can fly but I have no wings. I can cry, but I have no eyes. Wherever I go, darkness follows what am I? I asked my kid this and he actually got it right took him a couple of guesses. It’s a cloud.
Rick Ripma 14:26
Well, he’s smarter than I am. I couldn’t figure it out.
Ian Arnold 14:30
So for all you numbers, people out there here’s one for you. I add 6 to 11 and I get five. Why is this correct? Again, if you want to go to HardWorkingMortgageGuys.com and email us we can go ahead and tell you if you’re right if you don’t want to wait till next week.
Rick Ripma 14:51
Yeah, it’s these are great questions. You put them together and they’re great questions.
Ian Arnold 14:56
All right. So let’s go ahead and talk about what’s the economy doing how does that affect normal people and also the mortgages and stuff like that? I mean, you and I talk about it. So we’ll start with the first one that I Oh, I see you, you’ve seen the whole transition because you’ve been in the business for a long time. But I saw the late last part. So but the main thing we see, we don’t see people anymore. Most people do everything online. So whether it’s sending us document signing disclosures, people don’t realize you can be at your work, we can send it to you can do everything and send it right back. You don’t have to stop in the office, which is weird.
Rick Ripma 15:36
It is weird. And I’ll tell you, for me, it’s not just online, we’re on the phone, we do a lot of conversations with people on the phone, we do a lot of conversations via email, we do conversations via text, we do conversations like I do a lot of videos that I put out, specifically to people in my emails, so that I just find it easier to communicate sometimes by talking rather than writing it down. But it is it’s a totally different world back in, you know, back when I got started. Everybody came into the office. And it was much harder for them. Because you had to get the time, figure out the time, schedule everything take time off work. And yes, now they don’t have to do any of that they can do it at night, they can send it to us. You know, we had to do a zoom call, we can do zoom calls. I mean, there are so many options today to talk to people. It is I think very helpful. And makes it a lot easier on people to do that piece, the mortgage piece, and the paperwork part has changed a little bit because of some of the changes that they’ve made and the conventionally with what they require. But getting those documents and things has also become a lot easier because you don’t have to drop by you can put everything in we have secure areas to upload documents. So it’s really, really helpful.
Ian Arnold 17:06
So that’s where it’s affected us now, when is affected customers and stuff is we see a lot of people that can work from home, we see a lot of people that even have a hybrid system. So for instance, my wife got to let her bought her company got bought out. So she started looking for jobs. It was funny, she said when she was looking at jobs, she didn’t mind working in the office, she didn’t mind. But when somebody said that they were at home, most people all wanted to everybody applied there. But people who said that had worked in the office companies said they had to be there. She said they were it was probably like 10% of those numbers. Wow. And I thought I mean, at first you’re thinking well, where we were used to working at home. But now people don’t want to. So what they’ve done is they wanted to work from home and then transition their home into parts of their home into an office. So I know you’ve seen quite a few of your customers try to remodel and stuff like that. Which, hey, if it works for you, great. I’m not a person that loves working at home, I like coming to the office. I like to chit-chat and the whole camaraderie of seeing people but that’s just me.
Rick Ripma 18:18
Yeah, I agree. I prefer to work from an office. I don’t know in this whole time if I’ve spent more than eight hours working at home, other than, you know, on the weekend or evenings when I have things I got to get done, which I always did. But I don’t you know, I even when I put in my schedule, I’m gonna stay home I can it’s just easier to come in for me. But I also think it does matter what your house is like. In other words, if I had a designated area that it was made into an office that I could shut the door and really preferred I have something outside you know, like a little shed type thing that was all fixed up and you had air and all that stuff. I could do it because I just need to getaway. I agree with you though. We’re social people. So we want the camaraderie we like to be around people. You don’t want to go back to one of the other things you had we are talking about you know how people are online and over the phone. What about you know, the most people are a lot of people start their shopping online. However, the problem with shopping online is you don’t have all the information. When you shop online. There are a lot of nuances to a mortgage. You really need to talk to somebody.
Ian Arnold 19:34
Well, you have to look at it online is when you go online, all they’re trying to do is give you all the good stuff, and when I don’t mean it as like good-bad, but they are just trying to sell themselves. When you actually talk to somebody they can break down because what you have and I’ve always discussed everybody’s situation is different. Everybody has their own story. So with your own story comes your own Credit, things you have not everybody has a 750 credit score. Why do you have a 740? Well, guess what if I got you a 760, you get a better rate. Okay? That’s awesome. I mean, or what happens if I just tell you, Oh, if you did 20%, down, there’s this. That’s what you select on your calendar. But if I told you to 25%, down, your rate changes. Whoa, whoa, hold on to that. So it’s to have all the information, not just a little bit of the information,
Rick Ripma 20:28
right? Do you want the knowledge? Yes. And it goes even farther than that, which is a number that most people don’t even think about the debt-to-income ratio, which can change what your rate is. Yes, right. Easily. Everybody knows their credit score can change the rate. Most people know, maybe, maybe not. They know that maybe how much they put down can change the rate, you know, what they don’t know is if you put 19% down, you get a little bit better than if you put 21% down or 20% down. And then you get a better rate when you get to 25% down or at least better pricing, you know, so it does matter. But let’s get back to you know, working at home, you know, what do you think you think gas prices and all that have anything to do with what people want to stay home?
Ian Arnold 21:09
I think at this point in time, we’re What is it almost $5 I think that’s going to basically have a huge impact, where people are not going to want to drive as much. I mean, unless your company’s paying for your gas. I mean, if you live two minutes away from work, okay, you’re an outlier. But most people are going to live like 30 to 40 minutes away and drive constantly. And what most people don’t realize is when this happened back in Oh, eight, guess what happened? All SUVs tanked and sales price, right, everybody went to cars. I haven’t seen that this year, which is kind of shocking to me. So either we’re just getting used to it. And just but I believe that if somebody walked into an office like, Hey, can I work from home at least a couple days a week, so I don’t have to drive as much because gas prices are if you can easily do it, bosses are going to say yes. And one because they don’t want to lose somebody. Because it’s hard to hire people. And if they’re working at home the same as they work here, then what’s the big difference?
Rick Ripma 22:11
I think that a big piece of that is there was a lot of fear that people would work at home and they wouldn’t actually work. And now that we did that, for so long, so many people work from home. Every place Everybody I talked to the numbers showed that the people who worked from home actually work just as much if not more, they got more done. Whether they worked as much, I don’t know. But that’s, to me, that’s never been the important thing is getting everything done, they get everything done, and everything gets done correctly and all that I think that’s a big benefit. Because we have several people who work from home and it just works for them. And I know that it makes them happy, especially with the gas prices the way they are. And, and then a lot of people because of all this not just the gas prices, they did this before, but because of the pandemic and being stuck at home. They bought bigger houses where they can work out of their house.
Ian Arnold 23:05
Correct, I mean, imagine if you’re not spending that money on gas. And then so you’re saving, let’s say you spend $30 a week on gas. And I’m saying you’re driving a small little car, you’re not driving there much. So you multiply at times four weeks, a year, or four weeks a month. That’s $120. All right. Well, there’s some savings. Measure what your house you were there. Now then imagine if you’re working from home all the time, your wife’s working from home all the time, how many cars do you need? One may be, because you guys are going very far. I mean, not saying everybody’s getting rid of their second car. But that saves quite a bit of payment in there too. So yeah, we we’ve seen it. I mean, even a couple of my friends, worked. They both all work from home, and they don’t they they went ahead and upgraded. So they got that extra bedroom, you know, they took that extra bedroom into made into an office. So they set up the triple screens that they needed and all that stuff and they’re happy go lucky there. And I’m like that works for you. Great. But as you were saying one reason that they might be a little bit more productive is when you get to work. What do we all like to do as coworkers if you like your coworkers if you’re talking to them when you’re at home, who you got to talk to your dog?
Rick Ripma 24:20
And you know, that’s a good that is a really good thing to talk about or to the point that you’re making, because the one thing that I have heard is companies are worried about their culture.
Ian Arnold 24:35
Yes, I can definitely see that.
Rick Ripma 24:36
Because the cultures are changing because employees are not around each other. And I also think that another issue they’re having based on what the people I’ve talked to is you don’t feel a connection. So you’ll change jobs. Because there’s I don’t have a connection to this company. I don’t even go there. I don’t know anybody. I can’t imagine how hard it was for people to start jobs and never meet anybody, only on Zoom, that, to me, would be very difficult.
Ian Arnold 25:10
Another thing is what’s with the increase in inflation? Think about how that’s affecting people. I mean, that’s also I mean, even every price of food, you go buy or clothes, everything has gone up. With that, especially in the elderly community, we’ve seen a lot more reverse mortgages. Because what they were anticipating on making in with social and pensions, they’re not, they’re not, that’s not going as far-right, so they’re doing a reverse mortgage, to help offset some of this inflation costs,
Rick Ripma 25:43
Right. And because of the increase in the values of our properties, there’s a lot more available equity to use for the reverse mortgage, because the reverse, you don’t, you aren’t going to go to 100%, you know, you’re not going to go to 80%, you’re going to be capped based on your age and a variety of things. They cap them because they continue the mortgage, if you don’t make payments, which you don’t have to the mortgage continues to increase. But it is a phenomenal mortgage for somebody, you have to be 62 or older, in the proper situation where they need either additional cash or you don’t want a mortgage payment, and you aren’t prepared to pay off your home, it is a great option. So it is a place to really help cut the effects of inflation on somebody who’s really on a fixed income, correct.
Ian Arnold 26:34
I mean, and then the last thing really is, we’d like to is low inventory. So with the low, what’s caused the low inventory, we’re the first it was low, right? So when the government lowered the funding rates back and forth to the banks, well, that lowered our rates. So that what that meant is you were getting houses for like two and two and a half percent, far lower than what you were ever anticipating. So houses just started going way off the market. And then once that happened, now the people who want it needed to buy a house. Well, now they’re short now everything is going fast. So that’s a huge reason why the low inventory has caused this.
Rick Ripma 27:16
Yeah, and the low inventory has been caused by a variety of things. So it’s, you know, it’s, we have to look at that, and I know one of the charts that we were gonna go over, we’re running out of time, we probably won’t be able to go go to it too much as the demographics chart. We’re back in 1989. Well, actually, from 1981 to 1989, we saw an increase in birth. And because of that, 33 years later, if I could talk, it’d be great. 33 years later. That’s the average first-time home buyer 33 years old. So we’re seeing that increase in buyers. We also have seen, you know, it’s going to continue, it goes down a little bit, but it continues for another 15 years. So we’re going to see this for quite some time. Well, with that we’re running out of time. So we wanted to let you know, that we do appreciate your joining us today. If you have any questions you want, to talk about mortgages, go to HardWorkingMortgageGuys.com. That’s HardWorkingMortgageGuys.com. You can contact either Ian or I from there. And if you have any needs for mortgages, or have any questions or have any questions that you’d like us to talk about on-air, we would certainly appreciate it. Thanks again and have a great day.
Unknown Speaker 28:29
Well first off, thank you for joining us, Danielle. I appreciate it. And I just was curious, how did you come to find out about Rick Ripma and advisors mortgage,
Unknown Speaker 28:37
I was looking for a mortgage for myself for a brand-new home that I was building. And I wasn’t sure the direction to go, I didn’t have anybody in mind. So I kind of just spoke to whoever I could speak to. I got their number and everything seemed to be exactly what I was looking for. So I went with them. The thing I liked the most about Rick and his Advisors Mortgage is that I could go and upload things online. And I didn’t have to always be on the phone with them or send them documents or try to look for certain things that I needed to get the process going. Which was really great for me. I had a processor named Mark Coleman, who really helped me out in making sure I had everything I needed because I didn’t know the first thing about having a mortgage. So it was awesome to have so much help. I think probably what I’ve benefited from the most is really just the understanding that sometimes I would get busy and maybe I forgot to upload a document or I forgot to do a certain part of the process in a timely manner and they would get right back with me and it wasn’t like a hey, we really need this right now. It was always Hey, just wanted to make sure you still remember that we need this.
Unknown Speaker 29:49
Well, you don’t get that too much in this day and age. It seems like most people are either, you know very demanding of something they need from you and they need it right now. And I agree I’ve seen that in Rick’s attitude toward us. Over the last 10 years, he’s very patient but also helps to get the right things he needs. So, exactly in conclusion is Rick Ripma and Advisors Mortgage somebody that you would use in the future and or tell your friends and family about?
Unknown Speaker 30:15
Absolutely. And I just want to thank them for all the effort they put in to help me find my dream home.
Branch NMLS number 33041 Recruitment NMLS number 664589 equal housing opportunity some restrictions apply.
Rick Ripma 30:26
I’m Rick Ripma You can go to HardWorkingMortgageGuys.com
We Work With the Best Clients