Higher interest rates and house appreciation are impacting American homeownership, asrising mortgage rates and house prices reduce buyer affordability. But what is the discussion that Orion’s brokers are having with your clients about the current environment in the middle of June?

Brokers have found that the desire to own a home, and live in a certain place, is not hindered by mortgage rates, loan programs, or down payment amounts. Instead it is influenced by where one’s extended family is, a job is, where friends are. Price certainly enters into the discussion, but people continue use brokers to buy homes around the nation.

We’ve seen unforeseen price appreciation through 2020, 2021, and into 2022. And the rise in mortgage rates has impacted affordability. Many traditional first-time home buyers in their 20s and 30s have been content to rent, saving money for their own home. In the last few years many people in this age group “took the plunge,” financing their home through a broker, sometimes with the help of their parents, often in a less expensive location. Those who didn’t continue to rent, and see those rents increase.

Brokers remind potential buyers that rent prices are going up not only in city centers, but also all across the nation. Being priced out of a community because your client can’t afford to rent, let alone buy, is common. Rent increases, while painful to the tenant, are helping brokers reason with clients who are “on the fence” about buying a home. Having a fixed-rate mortgage means that there won’t be a landlord raising your rent every year.

Certainly monthly cash flow matters in the decision to move from renting to owning,right? Living near one’s family, in the right school district, the desire forstability, and pride of ownership all matter. And financially there is appreciation to consider, as well as equity, forced savings, and tax benefits. Interest is still deductible for the majority of mortgagors.

There is no doubt that the mortgage process for your clients is more complex than filling out a rental application. People, especially millennials, love convenience (e.g. delivery food apps, next-day delivery, free returns, etc.), and the mortgage process is not always convenient and is often filled with questions and delays. But Orion and our brokers have continued to streamline the borrower experience, but the process of originating a mortgage requires certain documents and is subject to a whole host of rules and regulations that can bog down many borrowers. But this would only seem a minor impediment to brokers helping with the American Dream of homeownership.

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