I want to talk about something that’s been on my mind lately—staying grounded in this ever-changing market. I know a lot of you are hearing the chatter from gurus and analysts saying we’re on the brink of sharp rate declines and a big bounce in home prices. But let me tell you, those folks likely haven’t weathered a real recessionary storm before. I’ve been through a few, and the reality is that this market is still weak, and there’s a lot of economic uncertainty on the horizon.
Refinance Now Before It’s Too Late
If you’ve got debt hanging over your head with rates north of 7%, now is the time to take action. This isn’t about chasing the market or trying to time it perfectly—it’s about safeguarding your cash flow and setting yourself up to weather whatever comes next.
Look, rates could go back up, and probably will at times. With everything going on globally, from geopolitical tensions to economic fluctuations, there’s no guarantee that rates are going to stay low or even drop further. In fact, we could see them swing back up before you know it. So if you have the opportunity to refinance and lock in a more manageable rate, do it now. It’s about protecting your bottom line and making sure you’ve got the flexibility to ride out any bumps that might be coming our way.
Solid Cash Flow Is Your Safety Net
One thing I’ve always preached is the importance of cash flow. In times like these, solid cash flow isn’t just nice to have—it’s essential. The market is still shaky, and we’re likely to see more layoffs and defaults in the coming months. Credit card debt is through the roof, unemployment is creeping up, and job growth is slowing down. Combine that with rising delinquencies in auto loans and a drop in consumer confidence, and you’ve got a recipe for more economic pain before things get better.
We’re also looking at a presidential election in 90 days, and that’s going to bring its own set of uncertainties. With so much up in the air, the last thing you want is to be overextended or caught off guard. My advice? Stick to short, simple projects, and don’t bite off more than you can chew. Now is not the time to “pounce,” but it is the time to prepare.
The Data Doesn’t Lie
If you need proof, just take a look at the data from the Mortgage Bankers Association. Even with a recent drop in interest rates, mortgage applications saw only a modest bump. Sure, refinance applications jumped by 16% from the prior week, and they’re 59% higher than they were a year ago. But the purchase activity only inched up by 1%, and it’s still 11% lower than it was at this time last year.
What does that tell us? Even when rates drop, buyers aren’t rushing to the market. That’s a clear sign that people are still wary, and for good reason. For-sale inventory is creeping up, but homebuyers are likely holding off, waiting to see if rates drop even further or if the economic landscape becomes clearer.
Prepare, Don’t Gamble
I’ve always believed that the key to success in real estate—or any investment, really—is to prepare, not gamble. This market is no different. While there might be opportunities on the horizon, the smart move right now is to make sure you’re not overexposed and that you’ve got a solid financial foundation.
So, if you’re sitting on debt with high interest rates or if you’ve got equity trapped in your properties, don’t wait for the market to change—take action now. My company, Ternus, can help you navigate the refinancing process and ensure you’re in the best possible position, no matter what the future holds.
Remember, now is not the time to get cocky. It’s the time to be smart, strategic, and ready for whatever comes next.
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