Happy new year! I have to say that while it’s still socially acceptable to do so. Here’s what you need to know for the year ahead when it comes to mortgages and real estate.
1. Mortgage rates are heading up
After reaching record lows in 2021, interest rates for new mortgages and ARMs are likely to rise this year. Although they’ll still be low by historical standards, we’re unlikely to see sub-3 rates again in the foreseeable future.
2. The housing market should cool
Last year also saw one of the most competitive housing markets ever, which strongly favored sellers. This year, buyers should have a little more breathing room, and prices should rise more slowly. It’ll still be competitive, but not quite as manic.
3. Mortgage rates are already rising
The first week of the new year saw the average interest on a 30-year fixed mortgage bump up by 13 basis points, to 3.4 percent. Rates should keep bouncing around this range for a while, according to most experts.
4. How to become a homeowner this year
With the cooling housing market, it could be your best opportunity in years to take the plunge into homeownership. In order to do that, however, it’s a good idea to set your strategy early and really know what you’re looking for before you start shopping.
5. Investing cash-out refi proceeds
This is not official investment advice, but if you have money left over from a cash-out refinance, you could invest it and turn a profit, rather than just paying that chunk of your mortgage back. Here’s what you need to know about how that works.