U.S. Dollar Is Surging & It's Not Good! Temporary Buydowns Are Back!
    In early April I wrote this blog and it went viral:  The U.S. Dollar Is Going To Collapse And It Will Be Horrific!  
    I highly recommend re-reading the blog because it turned out to be accurate and because it is educational.    But here is a brief summary:  The dollar will collapse at some point, but not for many years or even decades.  The reason is that the entire dollar market is just far too huge to be replaced in the near term.  No other country, currency, or economy (or group of them) is even close to big enough or trusted enough to offer an alternative currency that could replace the dollar.
    I was just repeating the opinions of Jeff Snider and Brent Johnson, so they of course get all the credit.  In any case, the dollar’s value has been sharply climbing in recent weeks largely in response to overseas financial troubles in countries like Germany, Japan, and China.   Brent Johnson explains this often; despite the U.S.’s many problems, we are less screwed up than other countries, so the dollar will remain in high demand.   Snider further points out that the demand for dollars/U.S. Treasuries increases during times of trouble, as everybody wants dollars/treasuries for collateral and liquidity.
    A surging dollar is not good though because when dollars get too expensive/valuable, it becomes too difficult for other countries to pay off dollar-denominated debts and/or pay for imports (like oil) with dollars that sellers/exporters demand.   This can create very severe financial repercussions that can impact the entire world … similar to what we saw happen in 2008.
    Anyway, Snider and Johnson are being proven right once again, so we might want to listen to them more.


    We are seeing a resurging interest in temporary interest rate buydowns for a few reasons:
    1. inventory is building in some markets, so sellers are again willing to pay for them;
    2. interest rates remain high, so buydowns are an excellent way to offer payment relief; and
    3. savvy agents know that the funds used for a buydown get refunded to buyers if they refinance before the buydown period is over.  
    As a quick reminder, a 3-2-1 buydown works like this:  The buyer’s interest rate in year #1 is 3% below today’s market rate; 2% below market in year #2; and 1% below market in year #3.
    So, if today’s market rate is 7%, with a 3-2-1 buydown, the rate in the first year would be only 4%!
    Only sellers can pay for temporary buydowns though.  And, once again, buyers get the buydown funds refunded if they refinance (very likely) before the buydown period ends.
    I wrote two blogs about buydowns that I recommend for much more detailed info:
    1. The Beauty of Buydowns To Lower Payments and Save Deals! and
    2. 3-2-1 Buydowns Are Not the New Option ARM!

    And finally, we love to help agents with marketing when it comes to buydowns, so please do not hesitate to reach out if you have a listing that is not moving.  

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