Despite higher mortgage rates, experts say the Bloomington market remains stable.
Rates recently have risen above 7 percent for the first time in two decades. Dave Peters, area sales manager at Thrive Mortgage, said he expects rates to continue increasing but that the Bloomington market has not changed much.
“The Bloomington market seems to a certain degree, which it’s going to get affected with these higher rates, but to a certain degree has not been affected,” Peters said. “The branch down here is business as usual.”
Peters said the purchasing market in Bloomington is still very strong and doesn’t have the debt-to-income issues that many other places have.
“Debt-to-income is what your monthly payout is on obligations as far as what shows up on your credit report plus the new home you’re buying and that’s your total debt-to-income and they divide that by your gross income and you can go up on conventional (loans) up to 46 percent,” Peters said.
LISTEN TO: Mortgage rates break 7 percent for the first time in two decades
Some owners fear another 2008 housing market crash. Doug McCoy, director of Indiana Center for Real Estate Studies and senior lecturer at the Kelley School of Business, predicts rates will continue to rise and said that concerns of a 2008-like crash are minimal.
“This recession, there’s not like that big issue out there that we had back in ‘08 when things weren’t real,” McCoy said. “There was a problem in the system, and I think our system has been pretty disciplined (since then).”
Peters agrees with McCoy, saying loans now are more solid.
“Back in ‘08, we had the NINA loans, no income, no asset, we basically said if you have a pulse, you could get a home loan,” Peters said. “From ‘08 to today, the underwriting guidelines have been these loans are pristine loans.”
Peters said he also expects rates to continue rising but isn’t concerned about a 2008-like crash. Peters and McCoy estimate mortgage rates will rise to 10 percent eventually.
