Wednesday, April 17th 2024, 9:54 pm
The Federal Reserve sets the monetary policy for the United States, which includes, of course, interest rates. Those rates have been high for more than two years. Higher rates mean it's more expensive to borrow money for things like home loans.
“Inflation has eased substantially as labor market has remained strong. And that is very good news. But inflation is still too high,” said the Chief of the Federal Reserve.
Those higher rates mean homebuyers in Tulsa are navigating the market during an uncertain time.
Burkely and Paul Hood just bought their first home in March. Finally landing on a house in Jenks, with access to two major highways.
"I thought it was going to be super, super, super stressful. And don't get me wrong, it was stressful. But we tried to keep everything as factual as possible," said Burkely Hood.
The couple has been saving money for the last three years.
"We wanted to save as much as we could, so even after we bought a home, we had like a nest egg afterwards. So, we really made a lot of sacrifices," said Hood.
Stephen Brocks is their realtor, a partner at Brown & Co. under McGraw.
"We have seen a lot of first-time homebuyers now coming in the market; it's part of life. So, you graduate school, you get your first job. We have good employees in Tulsa. We have physicians coming in to take on the first job. So, first-time homebuyers, we have them in wide swathes of life circumstances," said Brocks.
Brocks has been selling houses for the last seven years, and he's seen the market at different stages.
Right now, there are a lot of questions about buying a home.
"I think the biggest misconception is kind of twofold. Misconception number one is it's totally unattainable to buy a home right now, and interest rates are their biggest hurdle. And number two, most first-time homebuyers come in with the assumption that they have to put 20% down, which is just not true," said Brocks.
The Hoods and Brocks believe preparation is the key to success in today's market, like getting pre-approved by a lender and understanding home costs where you want to live.
If you do those things, you'll set yourself up for success when you make an offer. The good news is that offers these days aren't necessarily all about cash.
"But what you need to do is think outside the box. So, in our contract in Tulsa, it's not just price that matters. Okay, you can negotiate closing day, how long you want to do inspections, whether you're doing inspections, how much earnest money you're going to contribute," said Brocks.
The best course of action is to ask questions to the right professionals.
"Go talk to a realtor, maybe go talk to a loan officer or banker. But, really just getting out there and educating yourself. It's very important because you really don't realize how much you don't know," said Paul Hood.
At the end of the day, the Hoods enjoyed buying their first home.
Other tips from the experts are to interview several realtors to find the best fit and call several banks to find out what programs they offer, what they require to qualify for a loan, and what incentives they're offering.
Mortgage lenders say there are things potential homebuyers can do to help with the process.
"One of the biggest pieces of advice I have is that you really need to sit down with a banker and be transparent about your financial situation," said Nicole Hopkins, a banker. "Share pay stubs and tax returns and share about your debt. Share about your future plans. The more your banker knows about what your commitments are and what your future plans are, the more they can help you identify a pre-approval range that doesn't just fit the needs of underwriting and regulations but truly fits what you and your family are looking for."
How much you make, your credit rating, and where you're buying a home all affect your mortgage rate and payment.
The National Association of Realtors says the average home in Tulsa County costs about $235,000.
It says the average monthly payment is about $1,500 a month, which is about $200 higher than monthly payments from 2023.
Loan calculators based on federal data show mortgage rates are about 8 percent in Oklahoma.
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