What goes up must come down – except for the housing market, experts say.
Longtime loan officer and Longview native Jon Trussell oversaw the opening of a nationwide mortgage lender branch in October, nearing the expected end of pandemic-spurred low mortgage interest rates.
But even if rates rise, Trussell predicts the housing market will remain in strong demand — along with its Synergy One lending branch on 14th Avenue.
“Growth in the mortgage industry has been pretty wild over the past three years,” he said.
Rates, house prices are rising
Financial experts say the Federal Reserve is expected to announce federal rate increases this week, which would take effect in March. How many times the Fed plans to raise rates in 2022 is still unknown.
Interest rates are already climbing, Trussell said. Federal mortgage company Freddie Mac says 30-year fixed-rate mortgages are up 1.11% and 15-year fixed-rate mortgages are up 0.94% from a year ago . for the week ending February 17.
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As a result, Trussell said he sees fewer home refinances in his future and more home sales.
Low interest rates, cut by the Fed at the start of the pandemic, are behind historically high home values. People who used to sell homes gobbled up inventory with their low monthly payments.
Even if interest rates rise, Trussell doesn’t see an immediate end to the pandemic-fueled housing boom because there’s still a lack of homes on the market. Others agree. Real estate market Zillow reported last week that national year-over-year home prices are expected to peak in May at 21.6% and end the year at 17.3%.
In Cowlitz County, the median closing price for homes in 2021 was about 10% higher than the previous year, reports the Northwest Multiple Listing Service, a member-owned nonprofit.
Trussell said lending options follow rising prices.
The U.S. Federal Housing Administration loan, which offers lower down payments and interest rates, increased its maximum payment from $64,000 to $420,680 for Cowlitz County homes in 2022. The grand jump, Trussell said, is one he’s never seen and will even help the field game for new owners, whom he always advises to stay within their means.
“We’re not saying, ‘this is your maximum amount, go find a house,'” Trussell said. “We want them to set a budget with an accurate monthly bill.”
“Lending is fun”
The Longview Synergy One branch is one of three Washington locations of the California-based company licensed to sell mortgages in 45 states. Even before the pandemic real estate boom, Synergy One Lending was growing, quadrupling its loan production in three years, the company announced in 2018.
The company specializes only in home loans, Trussell said, as opposed to banks or credit unions that offer more lending options, like business and personal loans. The bureau offers applications and online options that don’t require a down payment, such as veterans loans for military and veterans, and United States Department of Agriculture loans for rural homes. .
Trussell worked for Guild Mortgage Company on Commerce Avenue for about nine years before the move. Prior to selling mortgages, Trussell managed youth programs at the YMCA of Southwest Washington in Longview and married Cathlamet native Addy Clark.
It’s the one-on-one work with neighbors that keeps him in the industry after about 19 years, Trussell said. He helps former students of RA Long, parents of his daughters’ basketball teams, and adult children of former first-time home buyers.
“Lending is fun,” he said. “It’s fun helping a nervous first time owner get their first keys. It’s fun staying local and keeping the local money.”
Talking Business is a series featuring new or expanded local businesses and print every Tuesday. The series was suspended during the pandemic and recently restarted.
Contact Daily News reporter Hayley Day at 360-577-2541 or [email protected] for possible inclusion in the series.