A Quick Guide To Understanding Mortgage Rates

By Shelby Campbell

With over two and a half decades of unwavering commitment to the mortgage industry, I am your seasoned Mortgage Loan Officer dedicated to helping individuals and families achieve their homeownership dreams.

What’s going to happen to mortgage rates this year? While it’s impossible to predict exactly where mortgage rates will go, several factors can indicate if they might drop, stay the same, or rise. However, understanding mortgage rates is important for homebuyers because knowing the market helps you plan better and get the most for your money.

Supply and demand play a big role in real estate. Right now, there aren’t enough homes for everyone looking to buy, which could keep prices steady or even push them higher.

What’s the impact of interest rates on the housing market? Did you know that a 1% drop in interest rates can lead to about 5 million more people searching for homes? This surge in interest creates intense competition, which can drive prices up, even if not everyone is qualified to buy.

What’s next for rates? As mentioned earlier, no one can predict exactly where rates will go, but there are two key factors we’re watching closely:

• Job market. The job market is a big indicator of what might happen with rates. If unemployment goes down, it typically means more people can afford to buy homes, which can push rates up.

• Inflation. We’ve all felt the pinch of inflation in our budgets lately. For rates to come down, we need inflation to level out. This will give the Federal Reserve more room to lower interest rates.

Is it a good time to purchase a home? Yes, it is, and here’s why: First, buying a home now can help you avoid paying more later if prices go up. Next, if you buy now and interest rates drop in the future, you can refinance your mortgage to get a better rate. Lastly, by entering the market now, you can avoid the crazy competition we saw in 2021 when some homes received over 40 offers.

I know timing the market can be tricky, but if you’re even considering buying a home, now might be the perfect time. If you want to get into the market and need guidance, contact me at (503) 809-8898, (503) 572-8865, and shelby.campbell@fairwaymc.com. We’re here to help you every step of the way.