For the past couple of years, mortgage rates have remained low. This month, however, rates began increasing, with 30-year fixed mortgage rates hitting just over 3.6%. Experts predicted these increases a while ago, but the process is happening a quicker than expected. This is likely due to inflation rates hitting a 40-year all time high. Don’t get discouraged. Rates are still significantly lower than pre-pandemic levels, and InterWest Mortgage is here to get you on the best path possible for a loan.
Economists think rates will hit 4% by the end of the year. The good news of this prediction is it means the economy is growing. From a historical perspective, these rising rates are still low enough to be an attractive time to get a loan or look into a refinance. If you can lower your rate by about 75 basis points or more from what it currently is, even if we’re not at the sub-3% rates we had back in January of 2021, you can benefit from a refinance. If you’re uneasy about this idea or just unsure if this applies to your loan, call InterWest Mortgage for a no-pressure discussion on what your savings possibilities may be.
The housing market has been intense, but it’s expected to cool down a bit. Demand should remain high throughout 2022, but if we’re being honest, a cool down is really needed right now. Many homebuyers are exhausted and frustrated by the market trends of the last year. The drop in rates was largely due to economic effects of covid and the various responses to the pandemic. Federal policies simply had to be put in place to avoid widespread foreclosures. Today, we’re seeing new variants of covid and some uncertainty remains, but the economy is overall responding better and is rebounding more quickly than in the spring of 2020. That’s partly why we’re probably not going to see rates dropping again, and as a whole, that’s a good thing.
For new homebuyers, it’s still a great time to buy a home. If purchasing a home is an upcoming goal for you, it’s a good idea right now to save up for a down payment. We recommend anywhere from 10% – 20% of the purchase price, likely leaning closer to a higher percentage. In the current market, you will probably need to submit aggressive offers to lock in the home you’re after. Also, get a plan in place with a trusted realtor and mortgage office. Navigating today’s market is tricky, a knowledgeable and trusted realtor will guide you through the appropriate steps. If you don’t have one, we have great resources for you and can get you in touch with experienced professionals. Also, get pre-approved for a loan so you know your payment requirements and can start working on your budgetary goals. We know mortgages and home loans can be intimidating, that’s why we have the best team in Idaho to help you make an informed decision. Call us today with any questions you may have.