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Inflation and higher interest rates have taken a toll on home sales, but does that mean prices are coming down?

Hi, I'm Rob West. Home sales could drop even further as we head into the winter doldrums when prospective buyers tend to thin out. So is this a good time to buy? I'll talk about all the state of the housing market today with Dale Vermilion. Then it's onto your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. Well, our guest Dale Vermilion is the author of The Mortgage Maze, the simple truth about financing your home, and I might add to that title from a biblical perspective. He's a good friend and brother in Christ, and Dale, it's always great to have you on the program. It's a blessing to be here, Rob. Thanks so much, and happy new year.

And happy new year to you, my friend. Dale, since the last time we talked, which I think was September, mortgage rates have occasionally dropped a tick. Does that mean perhaps we've seen their peak at this point?

You know, I think we really have. With everything changing in the market, with inflation starting to taper down a little bit, with the economy getting a little bit more stable, you know, as I've mentioned in the past, the Fed rate is not what drives mortgage interest rates. Inflation predominantly drives that in the bond market, and those have been improving. So I think we've seen the worst of it, and I think we're going to see stabilization this year, and even a reduction toward the end of next year. Yeah, very good. What might be causing mortgage rates to level off if they are, Dale?

I think you hit on a few of them. Well, it's really inflation numbers is number one. As we see inflation improve, we're going to see interest rates improve on mortgages.

It's consumer price index. As that improves, we see changes there. It's really all of the key indicators that the government looks at that drive it. But again, inflation and the bond market, and the bond market is pretty much controlled by inflation, are the main drivers that will drive mortgage rates down. All right, let's talk about home sales, though. Are the numbers continuing to decline there?

They are. We actually saw that pending home sales fell in November to the second lowest on record. In fact, the National Association of Realisters index of contract signings on purchase homes, which they do regularly, actually decreased to the lowest outside of the pandemic data back to 2001.

So, we're seeing a drop in sales. Houses sat in the month of December for 40 days before going under contract. That compares to 18 days back in May. That's a pretty big difference. The total number of properties available for purchase was up by 18%.

Now, that seems contradictory, but it's actually not. So, properties available are greater to consumers today who are buying because there's less buyers in the market, even though the housing prices are going down. So, there's actually some good news that's hidden in there for those that are looking to buy a home. And we did see new inventory tumble by 21.6% from last year. That's a big, big drop. And home touring activity was actually down 69% from the start of last year. So, we've seen a pretty big decline happening. Overall, about 4% in price drops, but we're seeing that start to happen. Interesting.

Okay. So, a pretty big pivot from a raging seller's market to perhaps a buyer's market, just based on what you're describing here. You said we're starting to see prices come down. Do you think that's going to continue if home sales are continuing to slow?

It will. We've already seen prices fall in 17 of the 50 most populous metros through December 25th of last year. And really, what we're seeing is prices are flat right now. They're not actually declining. They're staying kind of flat right now. But we do anticipate, because of all that's happening with inventory and all that's happening within the purchase market, that we are going to see price values start to drop a little bit more in 2023 and probably level off by the end of the year again. It's kind of the estimates that we're seeing out there today. So, listener Dale, who has some flexibility, they have the ability to wait on making that next home purchase. Would you advise them to do so, just given some of the uncertainty around a potential recession and other factors?

So, here's the craziest thing about that, Rob. Even though we're seeing prices drop, there actually may be a really good reason to buy it. After the break, I'll give you six reasons why. Okay. We'll take it. We're going to head into a break. Dale Vermillion with us today, author of The Mortgage Maze. The simple truth about financing your home is now the time to buy if you're looking to do so.

Perhaps it is. Dale will give us more on that. Plus, what about if you're selling? What do you need to know?

And what biblical principles apply to all of this? This is Faith In Finance Live. We'll be right back. Great to have you with us today on Faith In Finance Live. I'm Rob West, your host.

With me during this portion of the broadcast, my good friend Dale Vermillion. Dale is author of The Mortgage Maze. The simple truth about financing your home.

You can find it wherever you get books. And just before the break, Dale was talking about the state of the housing market. And Dale, you said that perhaps this is a time if you're looking to buy a home to proceed. And you had several reasons why. Share those with us. It is a good time in a lot of ways, Rob.

And let me tell you the reason why. You know, we think back, when we think of when's a good time to buy, we always think of interest rates first. You think back to early 2022 when rates were really low. But if we remember back in those days, as we do, there was a hundred offers on a house.

They happened within a couple of minutes. People were bidding well over listing prices. We were in the middle of bidding wars. It was hard to get a home.

All of those things really competed against us. Today, those have all reversed. You've got a lot less competition out there today because, frankly, a lot of buyers have sidelined off the market.

And now there's a much better chance. We saw the time that it takes to get a contract go from 18 days to 40 days now. So there's a lot more opportunity to get access to a home. There's also lower listing prices, like we talked about, because of some of these drops in value. You don't have the bidding wars in most cases.

In fact, there's very few of those happening now. Property values are actually selling at about 99%, 98.8% of listing price where they were 110, 120, 130% last year. And the best thing is it's a buyer's market. You've got better negotiating power now because the sellers want to sell. They're more motivated. There's less buyers.

So you're in better position. And concessions, seller concessions are very common nowadays. They were gone last year, but sellers will give concessions many times. So they'll pay for closing costs or pay for you to buy down your interest rate, which is a good thing. Construction and the construction side, builders are giving a lot of concessions to buy new construction. And here's what I think is most important, Rob, is last year, a lot of the contingencies were being waived, like appraisal and having an inspection, things you absolutely want to have, things like you couldn't take a contingency to sell your home to buy a home.

Those are all gone now in a lot of cases. So we're back to a normal market. It benefits borrowers. There's great tax advantages today. And lenders are more apt to get your proof today because there's a much wider diversity of products out there. Interesting. So perhaps this is the time to think about proceeding with buying that home if you're in the market for a new home. And Dale laid out a pretty compelling case to consider it. We're taking your questions right now, specifically in this portion of the broadcast for related to the housing market and mortgages.

Your questions for Dale Vermillion. We've got some lines open. 800-525-7000. That's 800-525-7000. Let's head to Indianapolis. Hi, Kathleen.

Thanks for calling. What's your question for Dale? My question for Dale is there's this house that we really want, but it's still almost pre-COVID inflation price. And I'm wondering if we should offer them what it was valued pre-COVID or are they just going to laugh us right out the front door? Yeah, interesting.

Dale, what are your thoughts? Well, Kathleen, great question. Certainly you don't want to overpay and we know that the market has shifted. This is where the realtor should be helping you. But if they're not, what you're going to want to do is you're going to offer what you feel the Lord is leading to, what you can afford and what you think is fair.

Now, it may not be pre-COVID price because value still aren't back down that low. But if they're really asking far too much for that property, you've got to come up with what you think is the right number. All you can do is ask.

You don't know the answer until you ask the question. That's the one thing you always want to remember with buying a home. And if you feel it's fair based on comparable sales, then they may feel it's fair too and it's worth making the offer. Yeah, Dale, I think it's important to recognize that what we saw over the last couple of years in particular, in terms of the dramatic rise in housing prices, it wasn't a bubble. It was driven by real demand, a lack of inventory, low interest rates. I mean, there was a compelling case behind that rise, not just easy money, right?

That is correct. And now you've got some things happening different where you can go back to the seller and say, well, look, weights are higher now. The market's changed. The economy's changed. We're seeing values drop everywhere else.

Have your homework done. When you go in, show comparable homes in the marketplace that may have sold or listed at lower prices and say, we want your home, but we've got to pay what's fair based on what other homes in your area are based on because comparable sales is always the best indicator of the value of a property. Yeah, that's exactly right. But I wouldn't go into it, Kathleen, thinking that if they're at or near where it was sometime last year, that it's dramatically overpriced. I mean, there was some real basis behind that increase in housing prices and housing prices really haven't come down very much. They're still right near where they were at their peak.

Could they come down this year? Perhaps we could see a softening, but just because you're still paying close to what market is, I don't think means you're overpaying. And the key is right now, Dale, houses are selling pretty close to listing price on average, as opposed to what we saw previously last year where they were selling 20 plus percent over asking, right?

That is correct. It's about 99% is the national average right now of listing price in a normal market is closer to 96%. So yeah, we're seeing those listing prices drop a little bit. But to your point, it's right about the listing price that homes are still selling for. Yeah, very good.

Kathleen, I think this is another great example of why you need a professional, a realtor walking alongside you to help you really evaluate that listing price based on closed sales, a comparative market analysis. Thanks for your call today. We appreciate it.

800-525-7000 with your questions for Dale Vermillion today. We're talking about the housing market. We're talking about mortgages and helping you navigate all of that here on the program today. Let's head to Illinois. Hi, Barbara. How can we help you? Hi, how are you? Glad you could take my call.

Thank you. I was wondering, what's the difference between forbearance? Would it be better than debt consolidation?

Okay, Dale, you want to weigh in on that? So forbearance is very different than debt consolidation. If you have equity in your property and you can refinance to get out of difficulties within your mortgage, you want to do that. You want to avoid forbearance if you can, because that could be a mark on your credit that you really don't want to have.

So definitely a big difference between those two. Yeah, essentially this is where the mortgage lender or servicer allows you to pause that payment or have a lower payment and then pay it back later. It's only in a hardship and as Dale said, it is going to have consequences on your credit. So you want to try to avoid that if at all possible. Now, typically we wouldn't think of a debt consolidation in the same way.

So what is it you're trying to accomplish, Barbara? What is your situation? Well, it's not my situation. It's my son's situation.

He's a truck driver and because of COVID and him getting sick at COVID, he was out for a while. So he had just bought a home last year and what he's trying to, he don't want to lose his home, but he's back at work now and he's not getting where he was when he first started out. So he wants to do something because it builds his housing up. Yes, I totally understand. Well, I think the next step is really to, first of all, dial into that budget, cut expenses wherever possible. That's really critical. But then secondly, run two-year creditors not away, including your mortgage company. Let them know the situation. They don't want to have to foreclose either.

So it's in their best interest to work out a plan with them. Stay with us. More with Dale Vermilion right around the corner. We'll be right back. Thanks for joining us today on Faith and Finance Live. I'm Rob Lass. With us for this portion of the broadcast, our good friend Dale Vermilion talking about mortgages and the housing market. Let's head right back to the phones to Tampa, Florida. Hi, David. Go right ahead, sir.

Hey there. Question for you in regards to, I know you're talking about housing and prices, things like that, but what about improvements on a home? I was looking to put a new roof on and I have some flexibility with time. I've seen prices rise. Is that something that might come down over time as well?

Yeah, Dale, your thoughts? I mean, obviously we're working through some of the supply chain issues that led to raw materials really skyrocketing. Has all that worked its way through the system yet?

It hasn't worked its way completely through the system yet, but it is definitely getting better. And contractors are also, because new construction has slowed down, contractors are a little bit more amenable on pricing for labor right now in a lot of cases. So those two things combined, you're probably going to do a little better now and it may get a little bit better by the end of the year. But that's one of those things, you know, we just don't know what the future is going to hold on the whole supply chain problems.

It depends a lot on world circumstances, not just U.S. circumstances. But I do believe that we're going to see a leveling off and we've already started to see that in the construction side. Yeah, it'd probably be a good idea to talk to some roofing contractors in your area, David, and get a feel for what they're seeing.

I know Jim Henry, our researcher, was just put up that, you know, he did some quick research on this and is seeing that roofing prices are not really expected to go down much in 2023 due to continued shortages. But you may find that with a particular contractor, you know, they have the ability to get the job done and maybe they're hungry for the business. So, you know, I think if you can wait, you're probably well served to do so.

But it's probably worth checking into. Thanks for calling today. To Florida. Hi, Orlando. How can we help you?

Hey, Rob. God bless you. Thank you.

I have a question. Unfortunately, I was kind of late to sell my house. You know, I was trying to do it at the beginning of the last year, but because of time and fixing the roof, I didn't know I could put a contingency on the roof.

But anyway, it's too late now. I've been in the market for about two or three months and no buyers. I need advice of continue selling it, renting it out or my purpose is get out of the debt. I owe about two hundred thousand dollars.

And another reason is downsizing. It's just me and my wife. Yes. All right.

Very good. Dale, what questions do you have to help Orlando determine whether he's priced the house right and how he should proceed, given that it's not selling? Yeah, well, first off, Orlando, have you looked at the comparable sales in your marketplace to make sure that you're positioned right on price? That's the first thing you want to know. And then the second thing, if you're considering renting, you know, you live in Florida.

I live in Florida, too. There's a lot of places where you could do short term rentals versus long term rentals. Do you have that capability for short term rentals? Because what might be a really good solution for you is, first and foremost, to see and make sure your your marketing price and in there is within the market of what you've got to your competitive. But you could do a month to month lease potentially in the interim, if that's what you're looking to do to kind of help yourself out. And those generally are going to get a little bit more pricing on those rentals for that. And that kind of covers both. Have you looked at any of that at this point?

No, I have a real car. And honestly, you know, I see her doing her best, you know, on selling the house. You know, open houses and everything. But, you know, I mean, I'm asking for God's will, you know, you know, be under his will, you know, if he's good to seller or not. So my last resource would be to rent it out, you know, but I don't know if it's feasible or I don't know. Yeah, you know, I think the key here is really just to look at your options. You know, it sounds like if you guys are trying to downsize, you likely need the money, the proceeds from this sale to put into the next one, wouldn't you, Orlando? Correct.

Yeah, I want to downsize, get out of debt and, you know, get some cash flow. Yeah. Yes. Yeah.

Dale, go ahead. I would just stay the course then. What I would do, if you've had this long of a period of time in this market with no offers, just make a price adjustment on it, see what kind of activity you get. And it sounds like the best move for you is really selling the house at this point, paying off the debt, getting into something smaller and putting yourself in a much better financial picture. Yeah, before, you know, I was planning, I was hoping, you know, in a big, making money, but now, you know, I would be satisfied, you know, with, you know, get rid of the debt and, you know, get some, a little extra money.

Dale, any final thoughts for Orlando? The only last thing is remember that if you've got something priced a little bit high and it's staying on the market, every month you're paying a mortgage payment on it, that's an additional cost out of what you would have earned anyway. So that sometimes offsets where you go, wow, you're right. If I just bring it down by this amount and I sell it much faster, I'm really going to break even at the end of the day, because I'm not having to pay that additional mortgage payment or two that will make the difference. So I think, again, just stay the course, get the pricing right. You can also offer some buyer concessions. We talked about seller concessions earlier to the buyers. That might be something you can advertise in your offer, because that helps a lot of times when the buyers know that you're going to provide some concessions that they can use towards lowering their interest rates on that mortgage.

That will help in the sale a lot of times. Very good. Orlando, thanks for your call today, my friend. God bless you. 800-525-7000 is the number to call.

Dale Vermilion with us for one more segment. So if you have a mortgage or a housing-related question, we'd love to hear from you today. And then we'll turn our attention to anything financial at that point. You can reach us again, 800-525-7000. Hey, have you ever thought about going to Israel?

Well, we've got a chance for you to do that. The trip is sold out with Michael Radellnick and Dr. Joe Stoll. However, Moody Radio is going to sneak two more people in. So if you'd like to enter to win a trip for two to experience Israel June 4th through the 15th, we'll cover the airfare, the hotel accommodations and more.

All the details are online at moodyradio.org slash Israel. We'll be right back on Faith and Finance Live. Stay with us. It's great to have you with us today on Faith and Finance Live. I'm Rob West. With me during this portion of the broadcast, Dale Vermilion, our good friend, author of Navigating the Mortgage Maze.

And he's weighing in on the housing and the mortgage markets. We're taking your calls and questions on those topics at this point. And let's head right back to the phone.

Chicago, Illinois. Hi, Shalom. Thanks for calling. Go ahead. Hi, Rob.

How are you? Thank you for taking my call. Of course. Thank you.

Such a blessing for the ministry that you're in. My question has to do with assuming my mom's mortgage. She passed in 2020. My son had passed in 2019, but she passed in 2020. Then my stepdad was supposed to be handling everything.

And then he just passed in 2022. So it's like I've been stuck trying to figure out what to do. My uncles who are executives that I should assume the mortgage is actually me and my brother. She left the house too. And he's in Nebraska and I'm living here and he has his own place.

So he's kind of stepping back. So now I'm not sure what assuming the mortgage would actually, you know, mean for me other than being able to give me, you know, the tax write off. And then the other thing is that, you know, because she willed the house to both me and my brother, I'm not sure of how that works in terms of me becoming, you know, sold on the title or with the mortgage. Do you want to keep the home, Shalom? Of course. Yes, I don't. Yeah, definitely. Okay. And your is your is your brother looking to get his portion of the equity out of it?

You know, he doesn't know what to do either. We're both kind of like this is, you know, kind of new for both of us. He's okay with me staying in the home or whatever, you know, and we really haven't had a discussion. I think he just kind of assumes that I'm going to, you know, keep the home and that if I'm going to keep it and I pay for it. But in terms of what you were saying, we haven't really discussed that. Okay.

Yeah, I think that's really the conversation you all need to have is kind of what do we want to do with this home? It's where you live currently. Is that right? That's correct. And we definitely don't want to sell it.

Okay. So he's entitled. I mean, it's the family home.

So it has emotional value to it. But it is also an asset, right? And his portion is 50% of that asset. So if it were sold at some point, then he would be entitled to half of it.

If he wanted to get his equity out of it, then you'd either need to refinance it and buy him out. Or if you had the cash to do so you could if he's willing to leave that portion of his inheritance in the home and just allow you to live there, then you'd be at that point looking to assume the current mortgage. Do you know if it's assumeable?

Yes, they're actually sending me the documents so that I can look over and see. But I just don't really know what that means in terms of me assuming the mortgage. I mean, I've never had a mortgage before.

So I'm not really sure what that means. Like if I assume the mortgage, of course, you know, I know about the tax write off, but then, you know, are they going to change the interest rate is right now 4.5. There's 56, a low over 56,000 left for the principal and all of that. Who's paying the mortgage today? Yes, I'm paying the mortgage today.

It actually went up about $400 because of the homeowners insurance, which now I have, I'm scrambling trying to get private homeowners insurance to reduce that premium, then put my escrow money back. Okay, so Dale, assuming this is assumeable, talk to Shalom about the benefits of assuming that mortgage. Well, the benefit is that the interest rate is lower than the going interest rates today. So that's one of the benefits that you have. It's a very easy transition, and you have to pay any closing costs for anything. So that's the main reason you would assume a mortgage is because the interest rate is good.

You don't have those costs up front. The thing that is complex here is because your brother's involved in that, to Rob's point, and he gave you great counsel on that, you guys have to make the decision on how you want to figure out how those assets are going to be divided as to whether or not he wants his money now, if he's willing to wait until you sell. That's the biggest thing to do. And you also need to have an attorney involved in this when it comes time to finalize on whatever you decide, because if you're doing an assumption, make sure that the attorney is looking over the documents and it protects you and everything's set up right on the title so you get all the tax benefits and the way the disclosures are set up and all that kind of thing. That's the key.

Yeah, very good. So I think that's good counsel. Your next steps here, Shalom, are ensure that your brother's willing to wait to get his equity out if you're going to continue to live there. The assumable mortgage, if it's assumable, that's a good thing because you're missing probably 5% of the mortgage value in closing costs.

Plus, you're going to lock in a lower interest rate, the current rate on that mortgage, which if you get a new mortgage would be higher to Dale's point, but you need a real estate attorney. So those would be your next steps and we can help you further along the way. Let us know. God bless you.

To Chicagoland. Hi, Tracy. How can we help you?

Hi, thanks for taking my call. Quick question. You're thinking about purchasing a smaller home, but yet it's a new construction. We're in a home that's a little over 20 years old, starting to have some issues, but we need to downsize too. So my question is, I read online that you can have, if we use the same mortgage company, that we can continue to have the interest rate that we have with our current mortgager. I just want to know if that's true or not. Like if we were to purchase a newer home, will we still be able to have our current mortgage rate or we have to start all over again with the higher interest rates today?

Yeah, Dale? There's not a program that I'm aware of where you can get the same interest rate. So for example, if you have a 3% interest rate from the early 22 or late 21 on your current mortgage and now you want to buy a new home, there's nothing I'm aware of any lender that does that just automatically.

That's more for refinances where they may have special programs for you. So you generally have to start over with a new product, sell that home that you're in, pay that off, get a new mortgage to buy the home. Is the home done? Is the new construction complete or are you going to actually build from scratch? It is, no, it would be complete.

Yes, it would be complete. And like I said, it's, you know, that's why I call and ask because I'm sure everything online isn't accurate, but it's okay to show it on two different sites that I could use the same mortgage company and keep the same mortgage rate if we purchased a different home. Yeah, the mortgage companies go by whatever the current rates are at the time, but I would certainly start with your mortgage company first. That's always the best thing to do and then talk to one or two others, you know, get a local mortgage broker involved, talk to a local bank or credit union.

Those are always good things to do and just get a couple different perspectives and they'll be able to guide you on what's the best program for you. Okay, all right. Thank you so much. Very good, Tracy. Thanks for your call today. Dale, you've shared some really valuable insights with us. This is a challenging time and yet we appreciate you helping us navigate it.

We've got about 30 seconds left. Tie a bow on this for us as we think about the housing market and mortgages right now. Well, you know, it's all about being prepared and it's all about seeking counsel. Proverbs 15 22 says plans fail for lack of counsel, but with many advisors they succeed.

Use your real estate professionals, use your mortgage professionals, talk to people you know and pray. That's great. I love it. Well, Dale, always appreciate your time, my friend. God bless you. We'll talk to you real soon. God bless you, Rob. Thank you. All right. That was Dale Vermillion, author of The Mortgage Maze, The Simple Truth About Financing Your Home, published by Moody Publishers.

You can pick it up wherever you buy books. All right, we're going to take a quick break. Can we come back? More of your financial questions on mortgages, the housing market, but also any financial topic.

800-525-7000 is the number to call. We'll be right back. Great to have you with us today on Faith and Finance Live. I'm Rob Les for taking your calls and questions today. Let's head right back to the phones.

Las Cruces, New Mexico. Hi, Alice. Thanks for your patience. Go right ahead. Thank you.

Hi, Rob. Thank you for taking my call. I'm a 70-year-old woman who's going to retire at the end of June. My question for you is, I have a thrift-saving plan, and I put it in the C and the F Fund.

I am concerned of do I let it ride out or do I move it all to the G Fund? Yeah. You said you're retiring when, Alice? The end of June.

This year. Okay. All right.

Very good. And when you retire, are you going to start pulling an income from this TSP account? I know that the GSP has to be moved out of the out of the company that I'm working, and apparently I have to find someone to manage my money. Sure. And right now, I don't want to pull nothing out.

Okay. But are you, once you retire, are you going to be able to pay your bills with other income sources, or will it require you to pull some money out each month? Because of my age, I think if they manage my money, they're saying I have to pull money out. Well, not really.

I mean, the required minimum distribution isn't going to kick in yet. What is your age? 70 years old. Okay. No, you've got a few years before you're required to take something out.

I guess I'm wondering, when you calculate your budget in retirement, and your income goes away because now you're retired, are you going to be able to pay your bills with social security, or are you going to need to pull something out of this in order to cover your expenses? I don't have to pull it out, sir. I can live on my income. Yeah, perfect. And what do you have in the TSP today, Alice, roughly? $300,000. Okay. And what was it at its high point?

Close to $400,000. Okay. All right. So it's down a good bit. And, you know, the market is down a good bit.

So you're down, you know, 25%, which is, you know, not insignificant. The reason is you're all in stocks right now. So the S Fund is the small company stock fund there in the thrift savings plan. The C Fund is the large cap, you know, basically the S&P 500.

So the 500 largest companies in the US. And so, you know, you're very highly concentrated in growth and large company equities. Plus, you've got that allocation to the small cap. I think the key here is that, you know, you've got time on your side because if you're in good health and the Lord tarries, this money is going to need you to last you a long time.

And the good news is you don't need to take anything out of it. So yes, I would agree. You probably need to have some money management. You need somebody who can, when it's rolled out to an IRA, somebody who can take responsibility for managing it. But I don't think this is the time personally, unless you just really want to, you know, get conservative and it's causing you, you know, you're anxious over it or you're losing sleep over it. I'd rather you take the time to let this recoup itself, you know, as the market recovers and that it may go lower before it goes higher.

We have to recognize that. But I'd rather see you let this rebound, not lock in those losses. And then once it recovers, and that may be a year from now, then at that point, at that point, we're looking to get more conservative toward what you would typically have as a 70 year old retiree where you might have, you know, 30 to 40% in stocks and, you know, 60 to 70% in fixed income type investments of which you really don't have any right now. And that would bring the volatility way down and increase the income that's being generated by the portfolio so that, you know, it's more stable and but it's still growing to try to outpace inflation.

So if you need it down the road for long term care or any other need beyond what you currently have coming in from social security, that you would have the ability to tap this account. Does that make sense? Yes, it does. Thank you so much. You're welcome. And I think now is a good time for you to start looking for that advisor.

So when you're ready to retire, you know who you're going to move it to. I'd head to our website unless you know you've already selected that person and you go to faithfi.com. That's faithfi.com and just click find a CKA. Alice, I'd probably interview two or three before you make your decision. God bless you and thanks for calling today. All the best to you in this exciting next chapter of your life. Let's head to Marion, Indiana. Connie, how can I help you? Hi, Rob. Thanks so much. I listen to you every day, so thank you so much for doing what you do. Well, thanks.

Thank you. My husband and I, we did some remodeling and we used our home equity line of credit. However, I'm sure you know the percentage rates are going up gradually and we don't have a whole lot on there, but I want to maximize the payment that we're making every month. Is it better for me to just continue to make the large payment every month? Because what I'm thinking is shouldn't I be making an additional payment, which would not be a problem, to counteract the interest to help bring it down a little more? Am I thinking right or am I totally off? No, I'd love for you to get that paid off as quickly as you can, Connie, especially with this rising interest rate environment, given the variable rate on that home equity line of credit, I think you having the ability to keep lifestyle at a minimum, try to free up as much margin as you can, assuming you don't have any high interest like credit card debt, and assuming you have an emergency fund, then I would say at this point, let's take extra surplus and let's add it to that monthly payment to try to get this knocked out as quickly as you can. Okay, that was my thought and I'm glad you're clarifying that for me and affirming it.

Is it okay? I mean, is it beneficial to make two payments or should I just lump it into one? Does it make a difference?

It really doesn't. I mean, I would, you know, check with your mortgage servicer just to see how they want it. Do you make that electronically? Yes, I do.

Okay, yeah. And so, you know, you just want to make sure that it's being applied to the principal as they receive it. I mean, this is so common that I can't imagine there's going to be a problem there, but it's never a bad idea just to check with them and say, listen, the way you're receiving this, is it being applied the overage above the scheduled monthly payment? Is it being applied to the principal balance right away?

But there's no reason that you shouldn't be able to send that as one check. Okay, that sounds great. I'll give them a call. Thank you so much. I appreciate it. You're very welcome, Connie. Thanks for calling and for listening to the program. God bless you.

Let's see, to Washington we go. Dustin, how can I help you? Hey, God bless you guys.

I just started listening to your radio station today and it's a blessing to be on here. Hey, so I have a question about mortgage rates and I've been looking into buying a house, but the houses are so expensive. Do we see a decline in the next few years? I know we can't really predict that obviously that far, but I haven't used my FHA that I'm qualified for.

What would be your suggestions? Yeah, you know, the best guess is that we really won't see much decline in the way of the housing market this year. I think at the most probably five to six percent, but you know, it's really just more than anything a leveling off of the increases we've seen in years past. We're going to have, of course, the natural seasonal declines which we're experiencing right now here in the winter, but kind of year over year, we're not expecting a whole lot. I mean, it's not like a bubble situation where we expect the housing market to crater or have any significant decline.

There is still a very real shortage in this country of homes, even though the inventories are building just in terms of the number of people sinking single family homes with the millennials reaching age 30 and having kids and people in densely populated areas that are moving to the suburbs because now they can work remotely. I mean, there's just a demand beyond the supply that exists, and so for that reason, you know, I'm not expecting a whole lot of decline in the housing market. Could we see interest rates taper off?

Perhaps, but it's probably beyond this year because, you know, keep in mind the Fed is going to continue raising interest rates. Now, mortgage rates don't always move in lockstep with the Fed funds rate, and we see that. You know, for instance, mortgage rates got above 7%.

Now they're back in the fives. So I would say all things being equal, even though the housing market is still very high, I don't think, you know, you waiting is going to make a whole lot of difference, and we're clearly in a buyer's market where we weren't, you know, six months ago. So you have the ability to negotiate, not pay a premium, have, you know, ask for concessions, maybe even have a contingency, things that really were off the table during the frenzy of the seller's market, you know, six months ago. So I think the key for you right now is to make sure you're ready to make that purchase, and that readiness comes from the ability to do a down payment of at least 20% and making sure that your principal interest taxes and insurance payment is no more than 25% of your take home pay. Now, obviously, if you you can go above that, but it's just going to make more and make it more difficult to balance that budget. So those rules of thumb, I think will ensure Dustin that you don't kind of extend beyond your reach financially. And I would lock those numbers in and make that decision on what you're going to spend before you go shopping for the house. Because what happens is, we start seeing homes that we want, and maybe in a location we want or with features we want. And we start to convince ourselves that, well, I can spend a little bit more. And next thing we know, we're buying a house that, you know, is outside of our reach financially.

And it just causes strain on the whole budget because it's for most people, their largest expense. So I think bottom line is this is not a bad time for you to start shopping. Just make sure that you're ready to make that purchase and you don't overpay. We appreciate your calling today. God bless you, my friend.

Well, folks, we've covered a lot of ground today, always fun to have my friend Dale Vermillion along with us and a lot of interesting thoughts here on the housing and the mortgage market. So thankful that you decided to join us today. Hey, let me mention FaithFi and this program, Faith and Finance Live, are listener supported. We do what we do because of your generous support. So if you'd consider a gift, become a financial partner of ours here at FaithFi, we would certainly appreciate that. You can head to our website, faithfi.com.

That's faithfi.com and just click give. Let me say thanks to my amazing team today. Couldn't do it without them. Thankful for Jim Henry and for Dan Anderson and Amy Rios and all the folks that make this program possible each day.

Faith and Finance Live is a partnership between Moody Radio and FaithFi. And hope you have a great weekend. We'll see you next week. Bye-bye.