The current mortgage business is even slower than it was in 2008

Average 30 year fixed rate mortgage rate more than doubled Since the beginning of the year, we have more or less tracked the Federal Reserve’s rate hike campaign.

When housing market slowdown“Marketplace” host Kai Risdal spoke with Vivian Geller, chief financial officer of Pacific Trust Group, a mortgage company in Los Angeles. This is a copy.

Kai Risdal: understood. we welcomed you in april, when the average 30-year fixed-rate mortgage was 5.1ish%. And you said then that your business “screeched to a halt.” And one can only wonder what life is like right now in the mortgage business with interest rates of almost 7%.

Vivian Geller: Oh Kai. Yeah, if you can believe it, it’s actually gotten worse. We’re seeing a bit of activity like the previous first-time buyers who bid on multiple homes last year, but they’re just starting to get their feet wet. But overall, it’s been really quiet.

Risdal: Are you surprised by the housing prices? Interest rates have risen so they haven’t fallen?

Geller: I’m surprised it hasn’t gone down significantly, but it’s been going down little by little. Now we are starting to see price cuts across the board across all price points. But yeah, compared to interest rates, I would have expected them to go even lower at this point. It doesn’t help, but it hasn’t impacted home prices as much as I thought it would.

Risdal: yes. How do you feel when talking to colleagues, either in the big real estate business or specifically in mortgages?

Geller: That’s pretty pessimistic. There was another huge wholesale lender, Finance of America. announced its closure this weekThat, coupled with some other heavyweights, is starting to see more layoffs across lenders. So it’s not pretty.

Risdal: The caveat here is that not everyone is buying homes. So you’re doing a little bit of business.

Geller: Yes, there are still activities. And like I said, some first-time buyers are back. They have been able to negotiate and get seller credit to buy homes. So, there is still more to come. And as you know, many investors have to think quickly and refinance an unsold property. There is still movement, but it is very quiet.

Risdal: What is Risk Appetite? So, are you taking out a riskier loan, or are you trying to stay safe? What are you doing?

Geller: Everyone has a variable rate mortgage at a higher price because interest rates are much lower. It’s a smaller price point that still does the 30 year fixed but at the higher price point people are taking that risk. Also I know you’re planning to refinance in about a year or so next year People are jumping in too.

Risdal: all right. So this is not my job, but when you get up in the morning, drink coffee, brush your teeth, exercise, do whatever you want, do you go to the office or jump on the phone? I mean, what do you do in a very slow environment?

Geller: Well, it’s funny you ask because I work out a little longer. But on some level, yes, it’s nice to have time. But you are worried. And you think, “Does this have a future for me?” But it goes up and down and things get better. That’s just the nature of the market. When you have beans, you have to save them.

Risdal: Yes, you should save your beans. how long have you been doing Twenty years, right?

Geller: It’s been over 20 years.

Risdal: all right. Compare and contrast the financial crisis of 2008 with today.

Geller: It is definitely slower now than it was in 2008. In 2008, housing prices fell. So there was activity because people were actually going back to the market to buy. As you know, there was a sale.But now you interest rate became highyou still have a relatively high price you too As you know, the stock market is crashing. So not good.

Risdal: All right, you’re the expert on this call about real estate and mortgages. How long will it be before things turn around again?

Geller: It could be the end of the second quarter of 2023. [Federal] The Reserve has said it will raise interest rates until then, possibly through the second quarter. And they are doing what they say they are going to do, so we have to believe them.

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