Mortgage rates have shot up since the beginning of the year and that’s affecting pretty much everything about real estate for the moment. Here’s what you need to know from this week.
1. Homebuyers are hitting the gas to take advantage of today’s rates
Rising rates haven’t yet done much to cool home prices, so homebuyers are moving fast to get to closing and prevent their monthly payments from rising. Applications for new mortgages rose 8 percent last week, according to the Mortgage Bankers Association. Realtors around the country are seeing competition heat up again as buyers try to beat the market.
2. Mortgage rates are still rising
Interest on 30-year fixed mortgages reached its highest level since March 2020 this week, averaging 3.75 percent. Although rates are still low by historical standards, the pandemic record lows seem to be a thing of the past.
3. Survey says: The upward rate trend will continue
In Bankrate’s weekly poll, most experts said they think at least one more week of rising mortgage interest is on the horizon, but it’s not all grim news. “Rates are shooting higher and are likely close to peaking as the market tries to guess how aggressive the Fed will be,” said Gordon Miller, owner of Miller Lending Group in Cary, North Carolina. “This has the appearance of an extreme overshoot so anyone buying a house this winter needs to keep the closing costs at a minimum in order to take advantage of a likely drop in mortgage rates later this year.”
4. Best low- and no-down payment mortgage lenders
With high housing prices and another spike in competition, many buyers will need to pinch pennies with their upfront borrowing costs. If you’re looking to purchase a house this year and are trying to maximize your budget, consider a lender who will offer you flexibility in your down payment requirements.
5. How a mortgage closing works
Buying your first home also likely means you’ll be attending your first mortgage closing. Here’s what to expect from this paperwork-heavy process.