Since President Trump’s move to sell 200 billion in mortgage bonds, the report shows the average rate on a 30-year fixed rate mortgage has dropped 10 points, from 6.16% to 6.06%. Housing expert Lance Thrailkill says it has created some momentum in the industry. “I think the market will rebound especially as timely as it is going into spring and winter. I believe there will be another rate cut coming into the spring and summer which is when the market heats up in general.” He said.
Thrailkill says it's positive, but it’s not the sweet spot. “I believe we need to get down close to the lower 5’s to move the needle. So many people are locked in at rates we have never seen before. It’s difficult.” He said.
He says there are products available like an adjustable-rate mortgage to help a buyer get their rate into the lower 5’s.
As rates decrease, allowing more people to experience the American dream of home ownership, this will drive housing prices up. He says supply has to meet the demand. “As the rates come down, we are going to get back into the same problem of affordability where we don’t have enough supply, and we can build homes fast enough to meet the demand.” Thrailkill said.
He says the industry needs to address the issue holistically in finding more innovative and efficient ways to build homes faster, as the current home construction methods are outdated, with the latest innovation being the nail gun.
3D Printing for example, can take anywhere from 24 hours a month to build a home and is said to withstand harsh weather conditions lasting for 100 years or more.
For now, he says it's a move in the right direction.