Mortgage rate trends
The 30-year fixed rate has skyrocketed in 2022, hitting 5% for the first time since The 15-year fixed rate has also jumped, topping 4% in April for the first time since 2018.
What does that mean for the real estate market? Sam Sharp, Executive Vice President of Guaranteed Rate, shares his insight into the current mortgage trends in this edition of the Mortgage Market Monitor!
How do higher rates affect home buyers and sellers?
Interest rates are up and higher than economists originally predicted for 2022. Where most believed rates would average between 3.375% and 3.5% for the year, interest rates have surged over 5% during the second quarter.
“For many people, the increase in interest rates is not going to impact their ability to get a loan,” says Sam. “On the flipside of that, it will for a lot of people.”
Even if the higher interest rates don’t prevent a potential homebuyer from qualifying for a loan, they may cause some homebuyers to hesitate and create a more balanced market.
“If interest rates and prices are higher, it could start to push demand down,” says Sam. “As things start to stabilize, more people could be motivated to sell.”
These home sellers will be looking to move for certain reasons (downsizing, taxes, etc.), and they may be in a better position to sell because of the reduced competition to buy their next home.
Rising rates could help prices, too.
“As prices go up, demand goes down, and prices could come down,” says Sam. “They may not. They may stabilize.”
A stabilized market could cause 30-year fixed mortgage averages to eventually fall to their predicted range for 2022.
Download the full Mortgage Market Monitor below!
Whether you’re looking to move into your first home or your third, Sam has essential financial tips to help you afford a home (and be happy in it, too) in the vipHome Podcast episode – A Chat with Sam Sharp of Guaranteed Rate.
Learn even more home buying tips in Top 10 Title Insurance Questions You Want to Ask But Never Have And Absolutely Should.
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