Mortgage applications decline again – market is leveling off

Mortgage applications have dropped again even though mortgage rates decreased for a short period in July. Other parts of the country are already in a buyer’s market while others are still just catching up and will be in a buyers’ market soon.


Here in the central Massachusetts area, we are already seeing the transitioning into a buyers market. More inventory is coming on the market and we are now finally seeing price drops! Glorious price drops!

Home prices are definitely still on the high side but at least they aren’t increasing. Boston and the surrounding towns are experiencing the still rising prices but most of central Massachusetts is leveling off thankfully.


The loan applications that are up are the ones for the refinance because homeowners are literally back to using their homes as banks because they now have equity! It’s bizarre that the lesson wasn’t learned the last time this all happened. Once homeowners start using their homes as ATM cards, the next phase is the default/foreclosures. Homeowners are making the same mistake in that they want to remodel or do an addition because they finally have equity. They think this is a better alternative to selling because they like to think they learned a lesson from the last crash.

The problem with this is that, this is literally the same pattern as the last crash and the crash before that, etc.


If you are a seller and you don’t want to “buy high” so you would rather just do an addition, make sure the addition will return you money on the investment. We are at the top of the market so doing an addition at the top of the market, leaves little room for appreciation. In fact, you can only go down in value and you would have to wait for the next housing bubble that will occur in 10-12 years.  The cost to renovate/add-on has increased considerably because when times were tough, contractors were willing to negotiate, now they are getting top dollar and picking and choosing the work they will take.  How long will the remodel take?

It’s important to remember if you sell high, you will buy high but you will be using the profit (equity) from the home you sell to put down on the new home and you wouldn’t have to live with the renovations, contractors NOT showing up, etc. Even with higher mortgage rates than what you probably have not, you will always be able to refinance that rate when rates come down so it doesn’t have to be a permanent number.  So make sure the return on investment is there.


Get a realtor into your home for an evaluation on your home’s value and let the realtor tell you if a renovation/remodel is the right choice. If you are going to add on, make sure you don’t out-renovate the home for the area.  If you are remodeling, make sure you don’t enter the red zone and over do it and never see a return on the investment.

It isn’t necessarily easier to just renovate/add-on to your home.  Is isn’t necessarily the right choice.  Make an educated decision and avoid making the mistakes that so many have made in the past.

And, as always (here comes the plug to work with us:-) if you are looking to buy or sell, give the team at Key To The Dream Realty Group a chance and text or call us at 781 269 2195 or email us at

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We service Real Estate sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, Uxbridge, Blackstone, MA.  We service Bristol County, Massachusetts as well (Attleboro, North Attleboro, Easton, Norton, Mansfield, MA)  and  all of Rhode Island!  We have experts on Cape as well and in the City of Boston and surrounding towns.  We go where you need us to be because we know you want to work with truth-worthy, honest and hard-working real estate agents!  Have car – will travel 🙂


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