One mortgage broker is advising clients to play the long game and tune out the noise of the current market turbulence
With continued volatility in the stock markets causing uncertainty, some real estate buyers are putting purchases on hold or backing out of deals until market conditions settle down.
However, one Cincinnati-area mortgage broker keeps the big picture in mind when consulting with hesitant buyers, especially when market conditions make interest rates erratic.
Phil Forbes (pictured top), senior loan officer with Warsaw Financial, likes to remind buyers that comparing current conditions to the previous year’s will always cause the buyer to regret not acting sooner.
“Last year was always a better time to buy,” Forbes told Mortgage Professional America. “In 2023, when I talked to people, they were waiting for rates to go back to 2022 levels. But rates in 2022 felt high compared to 2021 and 2020. Then you go back to 2019, and people were talking about how houses were a lot cheaper in 2018, and so on. Then you go all the way back to 2010, and you felt like a nut because the market had just fell out. There were eight houses for every buyer.
“Hindsight always makes it look like real estate was the right buy a while ago, and it’s always scary to buy it right now.”
Because of the recent market volatility, many buyers feel remorseful for not acting sooner. Some experts believe there could be more volatility on the horizon. But Forbes encourages his clients not to let that past regret keep them from making the right move now.
“People think, ‘Should I have bought the house last year? Yeah, I probably should have,’” Forbes said. “Does that mean I shouldn't buy the house this year? That's a different question. Just because last year was a better time to buy doesn’t mean that this year is a bad time to buy.”
Equity losses, rate jumps lead to hesitation
Last week, Melissa Cohn, regional vice president at William Raveis Mortgage, predicted to Mortgage Professional America, that if the market continued to be unstable, that some buyers would put purchases on pause. This was due in large part to a drop in wealth caused by large market drops last week.
“If it continues as bad as it is, people will start pulling out of deals next week,” Cohn told Mortgage Professional America on April 4. “The 800-pound gorilla right now is the fact that there’s been a significant loss in wealth with the drop in the equity market. Most people’s wealth is either in their home or in their 401k, for the most part. And when your 401k has dropped in value significantly, you feel less secure to go ahead with the purchase.”
Forbes reminds his customers that a home purchase is a long-term investment. While some tell him they want to wait for lower rates or lower home prices, he warns them it’s tough to time it just right.
“It’s a long-term purchase,” Forbes said. “It's a long-term asset. Settle in, buy the asset. It's going to be fine. You can't time the market. It’s like sitting there trying to buy a stock right at the right moment. And you know, you can get closer to the trough, but you're never going to hit the absolute trough. Or maybe you will every once in a while, depending on how often you do it. But for as many times as you buy a house, you won't hit the absolute trough.”
Damon Germanides of Insignia Mortgage predicts that stock market volatility and a potential recession prompt some home sellers to lower prices. He believes these market shifts create opportunities for buyers in overvalued markets.https://t.co/lV1lCesqPv
— Mortgage Professional America Magazine (@MPAMagazineUS) April 11, 2025
A wealth of equity built up
At the moment, Forbes believes people are sitting on properties they would like to move because they have low-rate mortgages.
“Just like a lot of people did with the refi boom when rates dropped,” Forbes said, “everybody refinanced. Well, now they don't want to sell their houses, which is causing a little bit of a dearth in the market. Those houses aren't selling right now.”
Forbes believes that despite some buyers' hesitation, the market will get rolling thanks to the amount of equity built up in people’s homes since the pandemic. The overwhelming equity, he said, will eventually drive people to sell or refinance, even if they’re sitting on a low interest rate.
“But the reality is that those people who were able to refinance are in a very stable financial situation, and those home values are going up,” Forbes said. “They're paying a ton of principal because the interest rates are so low, so they're just developing a ton of equity. So, it's really massively beneficial.”
It creates an opportunity for people who are looking to downsize to sell a property and potentially buy a new home with cash left over after the transaction, according to Forbes.
“The equity is getting overwhelming,” Forbes said. “The amount that their property has appreciated, in the amount that their mortgages are dropping, that spread of how much cash you realize by executing on the sale just keeps growing. At some point, you’ve got to take advantage of it.”
So, for customers who approach Forbes with concerns about the current market volatility, he encourages them to pursue the right deal, as long as it’s what they want in a house and a payment.
“For me personally, what I've learned is just to put your head down and grit your teeth,” Forbes said. “It's not going to feel great. Just buy it. You'll be fine. It'll take care of itself, but it's not going to take care of itself tomorrow. It will take care of itself over a period of years.”
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