Mortgage broker gives market update at Rotary meeting

Benson Ringle, born and raised in Walker and a graduate of Walker-Hackensack-Akeley School, provided a brief economic update at the Feb. 3 Rotary luncheon. As a mortgage broker with supreme lending for 10 years, he addressed each of the eight factors that influence the economic environment: world events, GDP, inflation, unemployment, the Federal Reserve, bond markets, mortgage rates and the housing market. Ringle said when lots of world events are happening, interest rates often trend down. Recently mortgage interest rates have come down a bit after hitting roughly 8 percent a few years ago. The Gross Domestic Product (GDP) represents the total monetary value of goods produced by a country. Personal consumption expenditures (PCE), also known as consumer spending, is a measure of the spending on goods and services by the people of the United States and is used by the Federal Reserve to determine interest rates. The unemployment rate is the biggest indicator of economic health and currently sits at 4.4 percent. The Federal Reserve sets the Federal Funds Rate which reflects the cost of borrowing for banks. Currently this rate sits at 3.72 percent. Bond markets are made up of 10-year Treasury Bills or T-Bills. T-Bills are a huge mortgage rate indicator, he said. The current interest rate on 10-year T-Bills is 4.2 percent. Ringle reviewed statistics from the Greater Lakes Association of Realtors. In the Leech Lake area, real estate is still moving and home prices continue to go up. The area had a 2.8 month supply of homes on the market in December, making this a sellers' market. The national home supply is a 3.3 month supply. Low interest rates during the Covid years have led more homeowners to stay put. Buying a new home might mean trading a 3 percent mortgage rate for a 6 percent or more mortgage rate. High interest rates, low supply and increased home values have led to the highest affordability index in history. The good news is that almost everyone realizes that this is a problem. Various ideas are currently under consideration to make owning a home more affordable. Ringle (left) is pictured with and Rotarian Brad Spry.