What goes up, must come down — except for the housing market, experts say.
Longtime loan officer and Longview native Jon Trussell oversaw the opening of a national mortgage lender branch in October, nearing the expected end of the low mortgage interest rates spurred by the pandemic.
But even as rates rise, Trussell foresees the housing market remaining in high demand — as well as his 14th Avenue Synergy One Lending branch.
“Growth in the mortgage business has been pretty wild in the last three years,” he said.
Rates, home prices rise
Financial experts say the Federal Reserve is expected to announce federal rate increases this week, which would take effect in March. How many times the Fed plans to increase rates in 2022 still is unknown.
Interest rates are already inching higher, Trussell said. The federal mortgage corporation Freddie Mac says 30-year fixed-rate mortgages increased 1.11% and 15-year fixed-rate mortgages increased 0.94% compared to a year ago for the week ending Feb. 17.
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As a result, Trussell said he sees fewer home refinances in his future, and more home sales.
The low interest rates, cut by the Fed at the start of the pandemic, are behind the historically high home values. People previously priced out of homes, gobbled up the inventory with their low monthly payments.
Even as interest rates rise, Trussell doesn’t see an immediate end to the pandemic-fueled housing boom because there still is a lack of homes on the market. Others agree. The real estate marketplace Zillow announced last week that year-over-year national home prices are expected to peak in May at 21.6% and end the year at 17.3%.
In Cowlitz County, the average median closing home price in 2021 was about 10% higher than a year before, reports the not-for-profit, member-owned Northwest Multiple Listing Service.
Trussell said the loan options are keeping up with rising prices.
The United States Federal Housing Administration loan, which offers lower down payments and interest rates, raised its maximum handout up $64,000 to $420,680 for Cowlitz County homes in 2022. The large jump, Trussell said, is one he’s never seen and will help even the playing field for new homeowners, who he always advises to stay within their means.
“We don’t say, ‘this is your maximum amount, go find a house,’ ” Trussell said. “We want them to set a budget with a specific monthly bill.”
‘Lending is fun’
The Longview Synergy One branch is one of three Washington locations of the California-based company licensed to sell mortgages in 45 states. Even before the pandemic’s housing boom, Synergy One Lending was growing, quadrupling its loan production within three years, the company announced in 2018.
The company specializes only in home loans, Trussell said, as opposed to banks or credit unions that offer more lending options, like commercial and personal loans. The office offers online applications and options that don’t require down payments like Veterans Affairs loans for service members and veterans, as well as United States Department of Agriculture loans for rural homes.
Trussell worked for Guild Mortgage on Commerce Avenue for about nine years before the move. Before selling mortgages, Trussell managed youth programs at the YMCA of Southwest Washington in Longview and married Cathlamet native Addy Clark.
It’s the one-on-one work with neighbors that keeps him in the industry after about 19 years, Trussell said. He helps fellow R.A. Long alumni, parents on his daughters’ basketball teams and adult children of previous first-time home buyers.
“Lending is fun,” he said. “It’s fun to help a first-time homeowner who’s nervous get their first keys. It’s fun to stay local and keep money local.”
Talking Business is a series featuring local new or expanded businesses and prints every Tuesday. The series was suspended during the pandemic and recently restarted.
Contact Daily News reporter Hayley Day at 360-577-2541 or firstname.lastname@example.org for possible inclusion in the series.