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welcome to the Deerwood Realty YouTube channel I'm John Schink you know what I've been saying for a while now is the affordability situation is so bad you're starting to see um people do things that are not always like the best thing but they're doing it to get by so we had an article about a week ago about people cohabitating right so you start living with your aunt or you start living with your grandparents or you get like three friends together and you buy a house because you can't afford a mortgage well one of the one of the more ugly things that's now reared its head that I just can't stand is we've now returned to this certain financing instrument that I just find to be not great for the average family the average couple the average person that's looking to buy a house but I understand what's going on here and so let's get to it it says the adjustable rate mortgage demand hits the highest level in nearly a year as interest rates continue to climb well now that's not great right some people I mean Bo in 2005 2006 you get that adjustable rate mortgage and if anyone says it's bad you tell them they're an idiot that's the way it was and gosh it just I still wake up at night and just oh the adjustable rate mortgage such a bad idea I mean that's just my opinion but let's get to it I mean I understand I understand we got to have affordability right we have to be able to get into this house and if we can't do it you know any other way we're going to have to use an adjustable rate mortgage it's terrible it's terrible and you should be quite upset with everyone that's involved in this uh this inflation of housing prices and the lack of affordability here we go says mortgage demand has essentially installed at the slowest Pace since 1995 as mortgage interest rates continue to rise I graduated from high school in 1995 and um that was a long time ago it says one type of mortgage however is seeing New Life the adjustable rate mortgage share of total demand hit 99.5% the highest level in nearly a year uh arms or arms offer slightly lower rates and that's just it I mean we were looking at Arms um a year ago and I was talking to my uh mortgage people and I I said you know hey well they would tell me hey we could do an adjustable rate mortgage and and then I'd say well what's the difference you know what's the percentage difference and they're like oh it's not that much it's not really worth doing so then now let's just see here I didn't I didn't put it in there but um it says it's around 7.9 to 7 7.7 um% whereas a uh a 5 in one five years uh reset is 6.99 uh percent so like it's it's it's not that much right it's not that much and and so anyway it's just I says applications to refinance a home loan increased 2% from the previous week and were 8% lower than the same week one year ago the the that that's the annual comparison is shrinking because refinancing crashed just over a year ago when mortgage rates first started to rise sharply that's a kind of important thing so let's let's look at this a little a little bit slower the annual comparison is shrinking because refinancing crashed just over a year ago when mortgage rates started to rise sharply but we have seen I did see that article where there was an increase in refinancing and I talked to my lender just yesterday and he said you know like he I don't we don't we don't talk in the same circles or something because he'll bring me stuff and it's just it's just like anyway he said hey John I just uh got a uh a refinance for someone and I was like tell me tell tell me more now uh he said yeah they uh they're having a little trouble making their payments uh they've got a lot of credit card debt and uh they've got an auto loan and they're just trying to roll that up into their their mortgage he said I think I saved them $800 a

month and it's like this is what we talked about maybe two weeks ago people refinancing it's stupid High rates because they're running out of money it's not a good thing right that's not a good reason so it says refinances now make up less than a third of total application activity just two years ago when rates were hovering around record lows they made up 2third of mortgage demand and this is really the reason why we're seeing this uh freezing in the housing market right everyone refinanced now house prices kept going up now no one wants to sell their house because they've got a great rate on it says applications for a mortgage to purchase uh home fell 2% for the week and we're 22% lower than the same week one year ago now look both on the uh applications for mortgage uh I was again I was talking to my friend and he said hey like I don't even pay attention really I don't I mean like my daily thing is not like how many applications did I get in and I can kind of see that uh I have buyers that I send uh two lenders and it takes it takes like maybe an hour for them to figure out if we can go buy a house it's not it doesn't take that long so I don't I I wouldn't worry about the applications the I mean the the affordability is what's killing things it's it's that's 100% what the problem says buyers right now are not only contending with higher mortgage rates but also with bare minimum Supply real estate agents report the market for existing homes is is essentially Frozen even before winter hits I like what they did there with the even before winter hits and Frozen that's the type of um that's the type of writing that I'm not able to do but look I I've always thought there was this weird thing in Google where you know if you want to search for something right if you want an answer to be true you frame the question so that Google makes it true so in this case like let's say you're a home buyer and you're like you know I really need to buy a home my my I'm getting married I'm having a child you know something's going on I I just you know maybe right now I got a raise at work not happening not not a reason to buy a house right now but anyway you go and you say uh I would I would like to get a mortgage and and the and the lender that you have spoken to said hey have you thought about a an adjustable rate mortgage and you're like no I really haven't and and so the the lender is like hey this might be an option for you and so you go to Google and you type you know how great are adjustable rate mortgages right right so you know or should I get you probably wouldn't type should I get an adjustable rate mortgage because that would be a little bit less than um what you're wanting right you you wanted to say yes it's a good idea and that's what concerns me about the adjustable mortgage what do you you so so here's what you're thinking if you get an adjustable mortgage right now you're assuming that within the next 5 years you're going to be able to refinance but not only that you're going to be able to refinance because the house the house price has either stayed the same or or hasn't gone

down because if it goes down you're not refinancing that thing you're in a bad spot and that's what happened in 2005 2006 adjustable rate mortgage the smartest thing in the world smartest guys in the world is getting them all of a sudden 2009

foreclosure so um let's go over just real quick this is my this is my thing if you want to go buy a house okay 30-year fix don't use creative financing creative financing is a way to get you in a terrible amount of problems at some point in time and it's not worth it if you cannot afford a to buy a house with uh conventional financing that is a 30-year fixed okay don't buy don't and I'm telling you that look does it hurt my business no because you weren't going to use me

anyway [Laughter] but it but it's just one of those things that as I've I've been in the business long enough look I'm just trying to help I'm just trying to help there's thousands and thousands of creative financing and it still doesn't ever come close to the simple 30-year fixed rate mortgage with that I'm going to head on out thank you for watching thank you for listening and I'll catch you on the next one