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Marry the House, but Date the Rate

Christian Johnson, Senior Vice President of Guaranteed Rate, talks North Texas home market predictions and how to use the opportunities in every cycle to your advantage.
By D Partner Studio |

In this ever-changing real estate market, what has been top of mind for homebuyers?

Interest rates for home loans. The FED initially raised interest rates by three-quarters of a point, and then did so again in June and September. This shifted the market and put the home buying and refinance market in a tight spot, especially the refinance market. This pivoted the mindset of consumers when it came to buying homes, because any time a big change like that occurs, it causes a lot of fear.

How can homebuyers get over this fear?

The challenge for lenders has been communicating the message that the average interest rate in the past 30 years has been 6.5%, and right now, we are actually buoying near that point. Buyers need to know that the interest rates we had during the pandemic were extremely unusual, but they lasted two years, which created a mindset that rates in the twos and threes are normal. They simply are not. There is a ripple effect from giving the store away for free. It’s not free; eventually, you have to pay for it. We are trying to get back to a balanced market, which is good news. It’s still a good time to purchase a home in North Texas. Rates are always a moment in time.

How is the North Texas housing market doing?

North Texas is still growing. Apartments remain at a 97% occupancy rate. There is still a need for people to buy a house, but apprehension has people sitting on the sidelines. When you combine the low rates of the past two years, plus a 20% appreciation in homes when Dallas homes normally appreciate at a rate of 5% to 8%, the apprehension is to be expected. The market has calmed down considerably, but because there is so much need and not enough inventory, the appreciation rate will remain higher than normal for the next few years. We simply don’t have enough homes to meet the need.

What has caused this drastic appreciation in homes?

We anticipate a 5% to 10% appreciation rate over the next couple of years. The FED won’t do anything until unemployment goes above 6%or the pressure of curbing recession causes them to cave. Right now unemployment is still low, and the word recession has been avoided. It’s very reasonable to think we should get lower rates in 12 to 24 months. More people can refinance, and appreciation will lower. We’re in the middle of a cycle, and cycles are totally normal.

What does “Marry the House, Date the Rate” mean?

If you have a $500k house with 10% appreciation over two years, that will be a $625k home at that time. You may be paying $12K in additional interest (due to the current rates), but gaining $75k in appreciation—that’s why you marry the house, but date the rate. There are opportunities in every cycle. You can buy a house at a reasonable price and get those appreciation gains for a few years, then refinance your mortgage loan later.

What are some of your predictions in the North Texas home market?

We are still going to see some bidding wars. People from all over the country are moving to North Texas. We are getting over 10,000 people a month. This means extra housing is needed, and builders are having—and will have—supply issues and a difficult time keeping up with the pace. This demand has caused prices to drive up throughout the area. For quite some time, people have been having a hard time getting a new-build house because of the stall, and they are paying a premium to get an older house. We are still seeing desirable homes and desirable neighborhoods in a bidding war, but not with the fervor we witnessed in the spring.

To learn more about Christian Johnson or how you can best “Date the rate”, click here.

Christian Johnson is the Senior Vice President of Guaranteed Rate. His experience in listening to customers’ needs and determining the right path for present and future financial success has assisted many families in calling a house their new home. Johnson’s attention to detail and tenacity to provide a hassle-free loan acquisition and closure reveals why he is continually chosen as one of the Best Mortgage Professionals in Dallas in D Magazine. Johnson closes all types of loans, from conventional and builder loans to 100% financed-only loans for first-time buyers to investors purchasing homes, condos, land, and construction. He has a broad knowledge of the Dallas-Fort Worth area including Kessler Park, Lakewood, Park Cities, and Fort Worth.


D Partner Studio

D Partner Studio

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