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Achieving Homeownership in Today's Market


By: Derek Chaney, Residential Lender & SVP

Achieving Homeownership in Today's Market


We know the homebuying process can be overwhelming, especially in today's market. That is why our MidMo Residential Lending Team is dedicated to helping you every step of the way and answering any questions you may have throughout the process. One of our Springfield Mortgage Experts, Derek Chaney, has answered five common questions we hear from client's when looking for a mortgage loan. 

1. Rates are high; why should someone buy?

We've heard this A LOT in the market lately. We saw rates peak in the Fall of 2023 but, luckily, are now seeing them trend downward. When rates increased, people were forced out of the home buying market for two major reasons: affordability and nerves. This decrease in buyers dramatically lowered competition, making the market much more buyer-friendly.

A couple of years ago, we often saw more than 10 buyers competing for the same home. Now, it’s not uncommon to see sellers receiving a single offer on their home. This lack of competition can ultimately save borrowers money. Fewer offers on homes mean sellers are more willing to negotiate–opening the door to seller concessions, where the seller pays a portion of the borrower’s closing costs. Also, borrowers have more time to think about the all-important question, “Is this the right home for us?”, again impacting how long the sellers stay in a home.

Everyone wants low interest rates but they come at a cost, more competition in the market. When rates rise, the market becomes more buyer-friendly. To most people’s surprise, interest rates are not statistically high right now, they are slightly below the historical average of 7.74%.  They seem high because we just came out of a market when interest rates were the lowest they had ever been.

2. How is MidMo helping homebuyers navigate the current market?

We review each and every lending option available to homebuyers and provide our recommendation, putting homebuyers in the best position to make the final decision. For clients looking to put as little money down as possible, we suggest our USDA, VA, and One+ programs. For clients wanting to keep their monthly payments low, we recommend our Temporary Buydown, HomePossible, and HomeReady programs. For clients making an offer on a home without it being contingent on the sale of their current home, we discuss recasting, refinancing, and bridge loan options.

We want our clients to feel 100% comfortable with the purchase of their new home. While we understand concerns about high interest rates, we focus the conversation on what’s important—the monthly payment. If we can help find a comfortable, affordable monthly payment, the interest rate becomes less of a concern. We encourage clients to look to the future, where rates may fall again, creating the opportunity to refinance for more favorable terms.

The most important factor in helping our clients navigate the current market is finding the correct (and comfortable) option to meet our client's specific needs.

3. What considerations should homebuyers focus on in today's market?

First and foremost, homebuyers should consider their monthly payment, rather than the interest rate. While a traditional loan lasts 30 years, homebuyers aren't necessarily stuck with a particular rate for 30 years. Refinancing is a powerful tool, in the right market conditions, to lower your rate. Also, FUN FACT: 60% of homeowners live in their home LESS than 7 years. There is a good chance you won’t be in the same home after 30 years, so there's a good chance you won't be in the same loan either.

Another consideration for homebuyers - “Does this home check the majority of our ‘wants and needs’ boxes?” If it doesn’t, don’t buy the home. Plain and simple. Since 2020, national home prices have increased 29% and interest rates have doubled, resulting in increased monthly mortgage payments. Choosing to buy a home has a significantly larger impact on your monthly budget than in previous years. Buyers need to make sure they are purchasing the right home.

4. What is our local market currently like?

One good thing about the Southwest Missouri market? – We are insulated from the larger peaks and valleys of the homebuying market in larger communities and coasts that we typically hear about on the news. Our highs aren’t as high, but our lows also aren’t as low. The market still changes but in a much less drastic way.

In 2020 and 2021, we saw homebuyers participate in what I call “leisure buying”. Their home purchases were not out of necessity (growing family, moving for work, etc.), but simply because they wanted a change and they could afford to make it. In 2023, we don’t see many “leisure buyers,” which is great for those looking for a home out of necessity. Home prices stabilized in the last year and the market continues to become more and more buyer-friendly.

2020 and 2021, also brought on a large number of homeowners refinancing their current loans into a shorter term. Coupling that with an increase in home values, homeowners found themselves sitting on a significant amount of equity in their homes, especially if they purchased several years ago. Fast forward to 2024, when those same folks are looking to buy a home today, they have more money for a down payment, keeping their monthly payments low despite the increased interest rates.

The biggest obstacle in our current market is home inventory. There simply aren’t enough homes for sale on the market. Despite a doubling of the inventory over the last two years, we are still about 40% below what’s considered a “balanced market.” Low home inventory means fewer options, making it significantly harder to find the right home.

5. What sets MidMo apart?

MidMo’s focus on homebuyer education sets us apart. Too often, we meet with clients preapproved with a less-than-perfect loan program by another lender. We spend the time, doing the research, and consulting with our clients to find the best loan option to fit their needs. We take pride in putting our clients first, and doing what’s best for them, rather than focusing on what’s going to make our bank the most money.

We also value communication throughout the homebuying process. As we reach milestones in the homebuying process, we are updating our clients. Nothing is worse than being left in the dark during a complicated process. We strive to keep you in the know, and out of worry, as your loan processes.

Lastly, we keep our rates and fees competitive compared to the market. During the real estate boom and historically low interest rates of the early 2020s, we saw many lending companies hire many new employees to keep up with demand. Now, during a time of lower demand, those large lenders are being forced to raise their rates and fees to support the size of their team. At MidMo, we stayed small and focused on perfecting our systems and processes, to keep our rates and fees low for our clients.