Taylor Swift has never really been on my radar until this year, and I know, I’m late to the party. Of course, I’ve known who she is, and I can sing along to some of her big hits (see “Shake it Off”) but she’s not someone I would ever consider seeing in concert. Until now. After seeing the videos on social media, hearing anecdotes of friends’ experiences at her shows, and seeing how her “Eras” tour is shattering concert records, I can’t help but be intrigued. And it seems like the entire world is intrigued. A recent Wall Street Journal headline read “Taylor Swift Is an Economic Stimulus Package.” When Taylor visits your city, millions are spent on lodging, food, merch, gas, and other travel expenses. She can do it all. So much so, and much to my delight, some of her lyrics even speak to the current state of the mortgage market. Who would’ve known? So let’s breakdown a few of her most famous lyrics and see how they relate to my favorite topic, mortgages.
“Barefoot in the kitchen / Sacred new beginnings / That became my religion, listen” – “Cornelia Street” from “Lover”
Renting an apartment in NYC continues to be pricey. Rents have hit all-time highs multiple times this year and despite interest rates being elevated, we’ve helped many first-time homebuyers in NYC who were fed up with throwing rent out the window each month, buy a home. The advantages of a tax benefit, building equity and future appreciation have outweighed the higher rates and higher rents for some buyers.
Most of these purchases have been coops and one of the beauties of buying a coop is that closing costs are minimal compared to that of a condo or a 1-4 family home in NY. That’s important to know because interest rates don’t have to drop that much to justify refinancing. We’ve also helped many buyers use temporary buydown options to have a lower rate for the first 1-3 years of the loan which has helped keep their payments lower than the market. All of this contributes to a “sacred new beginning” for many.
“That night we couldn’t quite forget / When we decided to move the furniture so we could dance / Baby, like we stood a chance” “Out of the Woods” from “1989”
When going through a life change, be it, getting married, having kids, kids graduating, getting divorced, losing a loved one, etc., one’s real estate needs are often impacted one way or another. And with the fall wedding season upon us, we’re having more and more conversations with soon to be newlyweds as they plan the start of their lives together. After committing to each other, many newlyweds are now ready to commit to a home. While renting may make sense for some, renters are at the mercy of the landlords and owners of those homes which can create instability in a relationship. Purchasing allows you to have control over your housing without being beholden to anyone. And if you want to move someone furniture around to re-enact your wedding dance, no one will stop you.
“From sprinkler splashes to fireplace ashes” – “You’re On Your Own, Kid” from “Midnights”
If you’re anything like me, I’m often planning, or at least thinking about ways in which I can make next summer even better than this past summer. For some, that means traveling more or going somewhere specific. For others it can mean playing more golf, tennis, or swimming more. And then there are those who spent time at a friend’s vacation home, whether it was in the Hamptons, upstate NY, North Fork of Long Island, the Jersey shore, etc. and thought to themselves, I would love to have a home here. This is the time of year where we speak to prospective buyers of 2nd homes also known as vacation homes. For some of these buyers they’re interested in seasonal rental income and for others, it’s a getaway they can use throughout the year. Whatever the case may be, there are many attractive financing options available for 2nd home purchases, where you may have a front yard with a sprinkler system and that cozy fireplace you’ve always wanted.
“It’s me / Hi / I’m the problem, it’s me” – “Anti-Hero” from “Midnights”
This should be the theme song for interest rates this year. The pace at which rates have risen have hurt businesses, real estate and of course the mortgage industry. More than half of all mortgage professionals in the country left the industry this year because of interest rates. More than half. With that said, it seems like it’s just a matter of time before we see rates start to turn. If our country sees itself in a recession which is certainly possible, rates will have to drop a bit to spur the economy back up. We’re presently dealing with a potential government shut down, the resumption of student loan payments, the union workers strike in Hollywood and the United Auto Workers, and rising oil prices. And not to mention, and I’m exhausted just thinking about this, an upcoming election season. There are many variables to follow here and interest rates will certainly play a role. We’ll be watching closely.
So what can’t Taylor Swift do? Through her lyrics she just educated us on the current state of the mortgage market. Are there any lyrics I missed? Feel free to reach out to the team with your favorite lyric as well as any questions you have on mortgage products or the market.
Vice President of Lending
CrossCountry Mortgage, LLC
C: 973.769.8180
scott.nadler@ccm.com
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