The High Price of a Home Purchase with Dale Vermillion

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That's faithfi.com slash give. Now let's dive into the podcast. Home mortgage rates haven't gone through the roof in recent weeks. That's the good news.

I am Rob West. The bad news is they're already pretty high. Coupled with high home values, it's an uphill climb for first-time home buyers.

Will it get easier anytime soon? Dale Vermillion joins us today to talk about it. Then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is faith and finance, biblical wisdom for your financial journey. Well, our friend Dale Vermillion is always a calm voice when you're stressing out about buying or selling a home. Dale is the author of The Mortgage Maze, the simple truth about financing your home, a book rooted in biblical principles, we should add. Dale, great to have you back, my friend. Rob, always great to be here.

Thank you so much. So Dale, rates on a 30-year fixed mortgage have been hovering around 7%. We can probably expect them to stay there for at least a while, is that right?

We can. Every analyst I've talked to thinks they're going to stay between six and a half and seven and a quarter for the remainder of this year. Not much less than that, so that's the outlook for 2024.

All right. When do you think we see a five handle or below? I mean, you think we're a couple of years at a minimum? I think we are. I think that unless something dramatic happens in the marketplace, we don't anticipate rates to get down in the fives probably until 2026 early. Late 2025 is the predictions that I'm seeing from every analyst I'm talking to.

All right. Dale, describe what it's like out there right now trying to buy a first home. Well, the biggest challenge, of course, is affordability. People think it's inventory, but actually inventory is up. We're at 620,000 homes nationwide.

Last year, this time, was 451,000. We're seeing new listings grow 8% from April to May. They're up 12.6% year over year.

And last year, we were down 23%. So inventory is not the problem. Affordability is the issue.

The average sales price is around $420,000. So you've got to be thinking about, you know, what can you afford and how can you make sure you budget properly to get into a home that makes sense? Yeah, that's the key is making sure you count the cost because the last thing you want to do is get overextended, placing unnecessary pressure on your financial situation. But given what you said about the fact that we don't see interest rates coming down materially anytime soon and inventory is improving, it doesn't mean you shouldn't be buying. In fact, this is probably a better time than we've had in the last couple of years as long as you're ready financially. Is that right?

That is absolutely correct. And the other thing we've got going is new construction starts have been up for the last couple of years. And there's a lot of builders starting to build in that lower $200,000 to $350,000 more first time buyer range. So keep your eyes peeled for that because there's gonna be more of that happening nationwide. Yeah. Now we're through the busiest season because a lot of folks want to get into a home before school starts and we're actually entering a season where it's a little better time to buy, right?

It really is. Although what's interesting about what's happened in the marketplace since COVID is that we're really not seeing seasonality anything like we used to anymore. It used to be that the spring, summer was the hot season, fall, winter was a little bit cooler. I think that's still probably a little better time to buy because there's less buyers in the market. But because there's so much population numbers and so much demand, pretty much when the market rates go down, the buyers come out of the woodwork. So any time you see rates up, that's your best time to buy right now because believe it or not, that's when you can have less competition, you can get into a home and we know rates are gonna go down eventually, you can drop them down. As you see rates drop, we're gonna see a flurry like we saw in 2020 and 2021 again.

Yeah, very good. What about pricing your home for sale, Dale? It seems like we've flipped. It used to be when I was growing up and my parents were buying and selling houses, you'd price it high and negotiate down. Now it seems like you price it lower, get as many buyers to the table, recognizing that people are willing to pay over asking. Is that a general rule of thumb?

Well, that's changing. What we're seeing now is, you know, in a typical year, we see about 33% of homes that go up for sale cut price before they close on the sale. So they're below the actual asking price. This year, we're seeing 35 to 36% in the last couple of months. So we're starting to see lists and prices drop. And from a seller standpoint, that means that you got to be thinking you're probably going to get right around what your sales price is that you're asking for.

Unless you're in one of those really hot markets where just demand is crazy and there's still some of those left. Well, we always appreciate you stopping by. Dale is the author of Navigating the Mortgage Maze. Dale, always great to have you. Thanks for being here.

Great to be here, Rob. Thank you so much. God bless. Back with your questions after this, 800-525-7000.

Stick around. Do you feel like your hands are tied with debt preventing you from serving God? If you have credit card debt, Christian credit counselors can help. Through our debt management program, we can get you out of credit card debt about 80% faster while honoring your debt in full. For more information on how Christian credit counselors can help, visit christiancreditcounselors.org. That's christiancreditcounselors.org or call 800-557-1985. 800-557-1985. Great to have you with us today on Faith and Finance.

I'm Rob West. All right, it's time to take your calls and questions today. The calls are beginning to come in, but we still have some lines open.

We'd love to hear from you today. The number to call is 800-525-7000. Again, that's 800-525-7000. We'd love to help you be that wise and faithful steward of God's resources that we know you want to be through an encouragement and Bible-centered approach to managing God's money. So call right now. We'd love to hear from you.

800-525-7000. Before we head to the phones today, in the news today, and this shouldn't come as a surprise at all, car owners are hanging on to their vehicles much longer these days. A new study by S&P Global Mobility shows the average age of U.S. cars and light trucks rose this year to a record 12.6 years. We all knew this as the pandemic, supply chain interruptions, inflation, not to mention high interest rates all seemed to hit one right after the other, causing folks to keep their cars the last few years. A study indicated that the vehicles 6 to 14 years old will make up about 70% of those still on the road over the next five years. By the way, as our friend and former host of this program, Howard Dayton says, the cheapest car to drive is often the one in your driveway. We will see prices continue to come down as those inventories build, but given the high price of cars, certainly used cars, but also new cars. On top of these high interest rates, I think a lot of folks are saying, I think I'll stick with this car a little bit longer, especially if it's paid for.

Make sure you do your homework before you set out to buy a car because it's one of the big three budget busters, housing, transportation, and food. So be on your guard. Don't let that get out of line. All right, let's turn to your phone calls today. Again, the number 800-525-7000. You can call right now.

Let's go to Portland, Oregon and begin with Wayne. Go ahead, sir. Thank you so much for your ministry. Just had a question.

I guess I need a Christian gut check, if you will. My mother is currently living in Jacksonville and she's been involved in a publisher's clearinghouse scam for all about the last three years. My brother and I and police officials and other folks have tried to convince her that it is a scam and she just won't, you know, won't believe us, continues to believe the scammers. And recently we rearranged to a solar house and put her in one of those types of environments where she's independent now, but can go into assisted living or memory care if need to be in the future. And she willingly went and, you know, things seem to be fine, but we realized that she's continued with the scam. And since I have durable power of attorney, I went through the closing and I find all the closing documents.

They did send the check to me, but it's in my mother's name. And, you know, I just I guess I just want to make sure that you you think that I'm doing the right thing by we're trying to save what's left, you know, what she has left. And she has given away a large sum of money at this point. And and she just is going to continue to do this. And I just, you know, I guess I just want to make sure that I think I'm doing the right thing by saving, basically saving what she has left and for her future. I forget to mention she is 83. She's in really good health so far.

And but just because the conditions she's gotten herself in and just won't believe anybody else, I'm afraid to let her have this last, you know, last bit of income that she would have. Yes, very good. I guess, you know, I'm just trying to be a good steward and a good son, you know, and I just want to make sure that I'm doing, you know, if you feel like I'm doing the right thing here, and if you can offer any advice, maybe.

Yeah, no problem. Well, I mean, you're you're pointing out some legitimate concerns here. I mean, there are several many now scams targeting the elderly, and so especially those with physical or cognitive impairments. I mean, they're subject to financial exploitation in a number of ways from, you know, outright scams to just people looking to take advantage of them. I mean, millions of elderly people are victims of elder fraud and financial fraud and schemes targeting aging Americans each year.

And you mentioned several of those tactics, including, you know, lottery scams or, you know, scams tied to a particular, you know, winning a certain type of offer. So you definitely do need to step in here, especially if there is cognitive impairment. And so I think you've done the right thing, you know, in taking greater control of the finances and or putting a monitoring system in place to keep track of their spending is the right approach.

I'm delighted to hear that you have that power of attorney. And that really is, you know, the key to you being able to make financial decisions on your parents' behalf. You know, I think if you still have the ability, you can talk to them honestly about how much involvement they're comfortable with. But, you know, there is often emergency situations where you have to take over financial management, but to let them, you know, guide the level of involvement if you can. And, you know, I think you're you're taking the right steps here. So I would, in fact, keep everything separate. And if you're, you know, taking over full financial management, do you have an advisor or somebody else that you can use as a sounding board? Or are you doing all this yourself? Yeah, we're pretty much doing ourself.

I mean, we're talking with folks from our small group at church and, you know, we're trying to keep it open to a lot of things. But I say our goal is to just minimize her being able to, you know, to get access to the funds because she will just continue. And even to now, her only source of income now is her retirement income, and she's giving that away every every month that it comes into her account. Wow. Yeah. So is that the next step? I mean, I know you're concerned about the proceeds from the home sale, but what about just the recurring income?

Do you need to use that power of attorney to step in and, you know, perhaps even make a change as to where that's deposited on a monthly basis? Yeah, that's that's my next. Yeah, I was actually hoping that she would get to the point where she realizes that this is still this is a problem, you know, because she's going to be getting an eviction notice here soon. And I was, you know, sometimes you have to hit rock bottom before we actually believe things are going on or, you know, that's basically the point where I'm at right now. And I guess I'm just kind of waiting for her to make the next move because she's often been very manipulative and been lying to us and, you know, keeping us out of the picture as much as possible.

Yeah, yeah, very good. Well, I think you're doing the right thing here. I would encourage you to stay down this track. I mean, the last thing you'd want to do is, you know, to see these assets be depleted just because she doesn't understand the implications of what she's doing. And so your ability to safeguard these assets is just exercising the responsibility that's been given to you.

And I think the role that you can play as a as a son. And so there's no doubt you're doing the right thing here, Wayne. If you need help along the way or you could use the counsel of an attorney, I wouldn't hesitate to reach out to somebody just to make sure you understand what you can and can't do.

But just the general idea that given the situation, the evidence of the fraud, the cognitive decline, I mean, all of those things point to just a real significant problem situation if you don't continue down this path. So I would affirm everything you're doing here, my friend. All right, sir. Well, thank you so much. And again, I appreciate your ministry.

Thank you very much. I appreciate that. Before we head into our break, let me remind you, you know, as we look at God's word and think about our role as managers of God's money, we can pull principles out of scripture that are practical, but they're also timeless. For instance, the big ideas that we want to communicate is first that God would be your ultimate treasure. But then as we get into money management, we want to spend less than we earn because that's the key to every financial success.

We want to avoid the use of debt because debt mortgage is the future. We want to set long term goals because the longer term your perspective, the better your financial decision today. We want to have margin to fund those goals that God has given us. And we want to give generously because giving breaks the grip of money over our lives. Well, I hope what we're sharing today is an encouragement to you. And above all else, I hope it draws you into a more intimate relationship with the Lord. We're going to take more phone calls just around the corner.

But first, this break, we'll be right back. Are you looking for a financial professional who aligns with your biblical values? Certified Kingdom advisors are trusted financial, legal or accounting professionals who have completed a rigorous certification program to ensure they provide biblically wise financial advice as part of their practice. You can find a local C.K.A. professional in your area by going to faithbuy.com and clicking Find a C.K.A. Frustrated by your health insurance, confused by the network restrictions and increasing premiums?

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That's chministries.org slash faithbuy. Before we head back to the phones today, let me just mention, you know, we're hearing from folks by email and through the mail and, of course, calling into the broadcast each day, just really having a difficult time with inflation and the challenges that creates with balancing the budget. In fact, we're seeing a really interesting trend going on right now that I think is just indicative of what we're experiencing. And that is our coaches, our certified Christian financial counselors, are telling us that as they're meeting with people to help them work through their budgets and get them set up on the Faith Buy app, they're seeing this trend of families moving into homes together because the housing market is so crazy right now. And prices are through the roof. People just literally can't afford the rent.

They certainly can't afford to buy a house, especially if they're just entering the housing market. And so as a result, they're sharing a home. They're going in together and saying, listen, we'll share the kitchen. Maybe you take the top floor, we'll take the bottom floor.

And I mean, it's just a really sign of the times, I think, of what we're experiencing. And we'd love to help you. Two things I will offer for assistance. One is if you'd like to meet with somebody who can help you put that plan together, answer your basic questions, not a certified kingdom advisor where you need wealth management or comprehensive planning. I'm talking about communicating as husband and wife around money, putting a spending plan together, putting a debt repayment plan together. You can do that on our website at faithbuy.com.

Just click find a professional. And when you choose either the debt or the budgeting category, you will be given a list of certified Christian financial counselors. These are men and women that their ministry and their professional training is helping God's people with really the pre-professional financial decisions. Again, around debt repayment, spending plans, marriage, communication. You can find those folks again at faithbuy.com.

Click find a professional. And when you choose debt or budgeting, you'll get that list of certified Christian financial counselors to connect with. Secondly, I would encourage you to download the Faith Buy app. You can do that on our website as well.

Faithbuy.com or search for Faith Buy in your app store. It will help you set up a spending plan, manage that plan using the tried and true envelope system, but in a modern, beautiful, simple expression of that on your smartphone. Julie and I use it, my wife every day.

We're in it looking at our envelopes, figuring out what we have left in our eating out or when she's taking one of my daughters shopping for clothes. It's real simple to say, OK, here's how much we have left. Let's make it work until next month. Well, you can't do that if you don't know where you stand. And the only way to stay on budget is to have a budget.

But you also need to have a system to control the flow of money. The Faith Buy app can help you do that. Check it out today, faithbuy.com. All right, we're going to head back to the phones. We'll get to as many calls as we can.

Eight hundred, five, two, five, seven thousand. Let's go to Arkansas. KJ, thanks for calling. Go ahead.

Yes, sir. I just want to get some advice about what you may thought about consolidating debt. I have a few credit cards, Capital One credit cards, some dental payments I'm making, and then I also had a couple of loans like through a firm.

One was an investment and one was a business opportunity to start a business. And the I guess the percentages are pretty high. And I'm just trying to figure out a way how I can get like my monthly payments down. Yeah.

Yeah. Well, I certainly appreciate that, KJ, and I know the weight that is on you right now. What is your income situation? Are you fully employed right now? Right now, I have some a little bit of a savings right now. And I just started with a company with financial services through a company called Prime America.

It's kind of slow right now, but I'm working to get like some of my license to make more money. But it's kind of tough right now. Yeah. I know. I can certainly understand that.

I would just encourage you, a lot of times, organizations like that, I'm not disparaging Prime America in any way, but the business model is just get as many people in as possible, and then have them go after their friends and family to try to generate business. And then after that, there's a lot of fall off. And so I would just say, if it's not working for you, if you're not making the money you need to make to cover your bills, I might be quick to look for something else, if that's not a good fit for you.

So just be on your guard there. And don't kind of overstay if, especially in light of your situation, if you're not seeing the income that you need to make to pay your bills. In terms of that debt, what I would do is not look for a loan consolidation. I know you mentioned the word consolidation, whether or not that's what you meant. That tells me new loan, roll up the existing loans, try to make the payment lower and the interest rates lower.

The problem is that typically doesn't deal with the issue that led to the debt in the first place, which is spending beyond your means. And so what I would do as a next step, KJ, is contact our friends at christiancreditcounselors.org. They've worked with thousands of our listeners.

They're incredible. They're all believers. It's a nonprofit. And what they will do is go through and look at each of those debts that you have. They'll help you put a spending plan together that balances, and then you'll pay one monthly payment to them, and then they'll pay your creditors for you. Now, the debt stays right where it is with each of your existing creditors. It's just that with that level monthly payment, combined with the reduction in interest rates that they're able to access for you, on average, you'll get out of debt 80% faster. And so that would be the way that I would go as a first step.

Again, that website is christiancreditcounselors.org, okay? Okay, so you wouldn't go with nothing like JG Wentworth or nothing like that? I would not. No, I'd leave the debt right where it is. I'd try to get the interest rate down, and I'd really focus on finding employment that's going to give you steady, predictable income that allows you to balance your budget that doesn't require you to go out and talk to a bunch of friends and family members into buying potentially life insurance policies that are expensive or maybe that they don't need. So I would just make sure you've got a good job that pays you what you need to pay your bills, and let's get on a plan to get this debt paid back, build up an emergency fund, and then live within your means moving forward. And for me, KJ, that's not taking out a new loan or working with a consolidation company. It's leaving the debt right where it is. Let's try to get those interest rates down.

And then systematically get it paid back over time, okay? Got it. All right. Hey, KJ, appreciate your call, my friend. Thanks for checking in with us on the program today. If we can serve you in any way in the future, please don't hesitate to reach out. You know, folks, so thankful for you stopping by each day being a part of this program. Thank you for the notes that you write and the comments that are so kind that you share when you call in and send us emails. We appreciate it. We love what we do here. And I couldn't do this without this amazing team that joins me each day to bring you this broadcast beginning with our on-air crew here today, Amy Rios, who's producing today, along with Tahira Haynes, and our call screeners today. We have a brand new call screener, Tiara, and we're grateful for her, as well as Lynn, who's sitting in working with her, and also Jim Henry serving us really well. In the meantime, we'll see you next week. Bye-bye. Faith and Finance is provided by Faithfi and listeners like you.