Riding the mortgage rollercoaster

Rob Purvis, senior loan officer and team manager at VIP Mortgage, isn’t pulling any punches when describing the current challenges in the mortgage industry.

“The biggest challenges are the interest rates,” he said. “What we just experienced the last three weeks has been unbelievable.” This sentiment hits hard—after a brief window of hope where rates appeared to be easing, the market has taken another sharp turn. “We thought we were seeing some light at the end of the tunnel, and all of a sudden… everybody has been talking about… interest rates are going to come down.” That didn’t happen.

Now the market's concerned about inflation coming back, “and we’ve seen the 10-year move 70 basis points in three weeks,” he added. For anyone tracking the economy, this kind of volatility is a body blow. “Interest rates are back on the rise,” he explained, adding that this creates a brutal situation for people currently under contract. The unexpected climb in rates leaves many scrambling, making an already challenging market even harder to navigate.

Housing inventory—or the lack thereof—is another thorn in the side. Purvis points out that the inventory shortage isn’t just local but nationwide. “It is… making it very challenging for customers who are trying to buy a home,” he said, noting that for many buyers, especially those trying to break into the market, it’s a perfect storm of rising rates and limited options. This is no small hurdle, even for someone like Purvis, who’s weathered numerous storms in his 16-year career. “It’s definitely been the most challenging environment that I’ve been through, personally,” he said.

Cause for optimism

Still, despite the bleakness of the present, Purvis isn’t giving in to despair. “I do think that there’s light at the end of the tunnel,” he explained, a cautious optimism that doesn’t diminish the reality of the current struggle. But for those facing the immediate challenges of higher rates and limited homes, that distant light feels faint. The reality is harsh: "It doesn’t help the people that are under contract right now.”

 This industry rewards those who grind through the tough times. “The best of the best rise in markets that are the most difficult,” Purvis said. He knows that while the number of deals may dwindle, the focus now is on gaining market share. His role, as he sees it, is to roll up his sleeves, show up every day, and work through the grind. "When we come out of this, which I absolutely have to believe that we will at some point next year,” he explained, “we’re on the other end of the spectrum with our production really jumping up because we’ve gained market share.”

That kind of tenacity comes with experience, and Purvis has plenty of it. “This is my fourth market like this,” he said, noting that each time, his team emerged stronger, having gained somewhere between 12% and 20% market share. But gaining market share in this environment isn’t just about luck—it’s about staying in front of agents and customers, keeping them informed, and continuing to push despite the headwinds. “Every time we’ve come out gaining,” he said.

Strength through adversity

Purvis is no stranger to tough times. Reflecting on past downturns, he points to his upbringing as a source of resilience. “Nothing was ever handed to me as a kid growing up,” he recalled. In the mortgage industry, as in life, there are no shortcuts. “When a lot of people want to give up, when things are hard… or they’re looking for shortcuts or easy, easy answers, easy solutions, when there are none,” he said, it’s the ones who stick to the basics, who work hard, who rise.

The same goes for today’s challenges. “It goes back to going back to basics, working hard, doing what’s right for your customers,” he said, knowing that this approach has never let him down. For Purvis, it’s about getting in the trenches and fighting through each day, whether that means staying in front of agents or constantly updating his customers. “How you take on these challenges head-on every day is how you’re going to end up with the results you want when we do come out of this,” he emphasized.

The Bank of Canada’s decision to cut interest rates by 50 basis points yesterday could indeed have a ripple effect on the US market, especially in regions like Arizona, where many snowbirds from the north migrate during the winter months. This influx could stimulate the local real estate market, albeit unpredictably.

“It does allow for some markets to pick up a little bit,” said one industry expert, who noted that while this seasonal migration typically helps, January is historically the slowest month. This is not just a pattern but a reflection of unpredictable shifts, driven more by buyers finding the right property than by broader market trends. "We had five contracts come in over the weekend," he said, noting that despite application slowdowns, pre-qualified buyers are still seizing opportunities when they find the right home.

The key message to potential buyers in this shifting market? Act now. “Buy now. We can refi later,” the expert said, emphasizing the looming pressure of increased competition when rates eventually drop. “If we wait till rates come down, the competition is going to be absurd again." This dynamic suggests that for snowbirds and other buyers, waiting could mean not only higher prices but also fewer concessions.

The market may be tough now, but for Purvis, it’s all about preparation, resilience, and timing. That’s how you survive—no, thrive—in this environment. "It's going to be very difficult," he said.

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