Central Alabama Real Estate BlogRecently posted or modified blog posts by tag - Mortgage rateshttps://www.jacobsandershomes.com/blog/Copyright JacobSandersHomes.com2023-04-25T04:51:41-07:00tag:jacobsandershomes.com,2012-09-20:6195How To Get Pre-Approved For A Home Mortgage Loan (It's Easier Than You Think!)
Getting pre-approved for a home mortgage loan may seem like a daunting task until you read on and find out that it doesn’t take much work!
If you’re eyeing a home that is the stuff of your dreams – good location, best imaginable layout and finishes, and reasonably priced -- the odds would be in your favor if you get a pre-approved mortgage loan. The process doesn’t happen overnight of course, but with enough patience and cooperation, it won’t be a hassle to jump through the hoops.
<img src="https://images.squarespace-cdn.com/content/v1/5b9ad876b105988967b0d652/1540343398565-DOSF169EV1OZRU5A6BSW/image-asset.jpeg?format=1000w" />Be sure to know what a <a target="_blank" href="http://www.fiscalgeek.com/2010/02/what-is-a-good-credit-score-should-you-care/" aria-label=" (opens in new tab)" alt=" (opens in new tab)" title=" (opens in new tab)">good credit score</a> looks like, as well as how to prepare a <a target="_blank" href="http://www.investopedia.com/terms/g/giftletter.asp" aria-label=" (opens in new tab)" alt=" (opens in new tab)" title=" (opens in new tab)">gift </a>letter. Transactions between you and the lender will run smooth if you are attentive and cooperative. After all of the necessary documents are given, the automated underwriting system will give a pre-approval letter and will enumerate any conditions that need to be fulfilled for full approval.
2023-04-25T04:21:44-07:002023-04-25T04:51:41-07:00Jacob Sanderstag:jacobsandershomes.com,2012-09-20:5117What’s Ahead for Home Prices?As the <a href="https://www.keepingcurrentmatters.com/2022/10/11/what-are-experts-saying-about-the-fall-housing-market/">housing market</a> cools in response to the dramatic rise in <a href="https://www.keepingcurrentmatters.com/2022/10/04/the-cost-of-waiting-for-mortgage-rates-to-go-down/">mortgage rates</a>, home price appreciation is cooling as well. And if you’re following along with headlines in the media, you’re probably seeing a wide range of opinions calling for everything from falling home prices to ongoing appreciation. But what’s true? What’s most likely to happen moving forward?
While opinions differ, the most likely outcome is we’ll fall somewhere in the middle of slight appreciation and slight depreciation. Here’s a look at the latest expert projections so you have the best information possible today.
What the Experts Are Saying About Home Prices Next Year
The graph below shows the most up-to-date forecasts from five experts in the housing industry. These are the experts that have most recently updated their projections based on current market trends:
<a href="https://files.keepingcurrentmatters.com/wp-content/uploads/2022/10/19093111/20221020-NM-Eng-1-1.png" class="lightbox-added aligncenter"><img loading="lazy" class="aligncenter wp-image-2085529 lazy-loaded" src="https://files.keepingcurrentmatters.com/wp-content/uploads/2022/10/19093111/20221020-NM-Eng-1-1.png" data-lazy-type="image" data-src="https://files.keepingcurrentmatters.com/wp-content/uploads/2022/10/19093111/20221020-NM-Eng-1-1.png" alt="What’s Ahead for Home Prices? | Keeping Current Matters" width="550" height="413" srcset="https://files.keepingcurrentmatters.com/wp-content/uploads/2022/10/19093111/20221020-NM-Eng-1-1.png 960w, https://files.keepingcurrentmatters.com/wp-content/uploads/2022/10/19093111/20221020-NM-Eng-1-1-300x225.png 300w, https://files.keepingcurrentmatters.com/wp-content/uploads/2022/10/19093111/20221020-NM-Eng-1-1-768x576.png 768w" data-srcset="" sizes="(max-width: 550px) 100vw, 550px" /></a>
As the graph shows, the three blue bars represent experts calling for ongoing home price appreciation, just at a more moderate rate than recent years. The red bars on the graph are experts calling for home price depreciation.
While there isn’t a clear consensus, if you take the average (shown in green) of all five of these forecasts, the most likely outcome is, nationally, home price appreciation will be fairly flat next year.
What Does This Mean?
Basically, experts are divided on what’s ahead for 2023. Home prices will likely depreciate slightly in some markets and will continue to gain ground in others. It all depends on the conditions in your local market, like how overheated that market was in recent years, current inventory levels, buyer demand, and more.
The good news is home prices are expected to return to more normal levels of appreciation rather quickly. The latest <a href="https://wellsfargo.bluematrix.com/links2/html/429eb828-b17e-4e47-8856-4ff59f9d3d1a">forecast</a> from Wells Fargo shows that, while they feel prices will fall in 2023, they think prices will recover and net positive in 2024. That forecast calls for 3.1% appreciation in 2024, which is a number much more in line with the long-term average of <a href="https://www.forbes.com/sites/qai/2022/08/30/housing-prices-are-dropping---yes-a-house-is-still-a-good-investment/?sh=54fdefd17372">4%</a> annual appreciation.
And the <a href="https://pulsenomics.com/surveys/#home-price-expectations">Home Price Expectation Survey</a> (HPES) from Pulsenomics, a poll of over one hundred industry experts, also calls for ongoing appreciation of roughly 2.6 to 4% from 2024-2026. This goes to show, even if prices decline slightly next year, it’s not expected to be a lasting trend.
As Jason Lewris, Co-Founder and Chief Data Officer for Parcl, <a href="https://www.parcllabs.com/articles/q3-real-estate">says</a>:
“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”
Don’t let fear or uncertainty change your plans. If you’re unsure about where prices are headed or how to make sense of what’s going on in today’s housing market, reach out to a local real estate professional for the guidance you need each step of the way.
Bottom Line
The housing market is shifting, and it’s a confusing place right now. Let's connect so you have a trusted real estate professional to help you make confident and informed decisions about what’s happening in our market.2022-10-24T11:52:22-07:002022-10-24T12:02:56-07:00Jacob Sanderstag:jacobsandershomes.com,2012-09-20:5060The Cost of Waiting for Mortgage Rates To Go DownMortgage rates have <a href="https://www.freddiemac.com/pmms/archive">increased significantly</a> in recent weeks. And that may mean you have questions about what this means for you if you’re planning to buy a home. Here’s some information that can help you make an informed decision when you set your homebuying plans.
The Impact of Rising Mortgage Rates
As mortgage rates rise, they impact your purchasing power by raising the cost of buying a home and limiting how much you can comfortably afford. Here’s how it works.
Let’s assume you want to buy a $400,000 home (the median-priced home according to the National Association of Realtors is <a href="https://www.nar.realtor/newsroom/existing-home-sales-slipped-0-4-in-august">$389,500</a>). If you’re trying to shop at that price point and keep your monthly payment about $2,500-2,600 or below, here’s how your purchasing power can change as mortgage rates climb (see chart below). The red shows payments above that threshold and the green indicates a payment within your target range.
<a href="https://files.keepingcurrentmatters.com/wp-content/uploads/2022/10/03144108/20221004-NM-Eng-1.png" class="lightbox-added aligncenter"><img loading="lazy" class="aligncenter wp-image-2085293 lazy-loaded" src="https://files.keepingcurrentmatters.com/wp-content/uploads/2022/10/03144108/20221004-NM-Eng-1.png" data-lazy-type="image" data-src="https://files.keepingcurrentmatters.com/wp-content/uploads/2022/10/03144108/20221004-NM-Eng-1.png" alt="The Cost of Waiting for Mortgage Rates To Go Down | Keeping Current Matters" width="550" height="413" srcset="https://files.keepingcurrentmatters.com/wp-content/uploads/2022/10/03144108/20221004-NM-Eng-1.png 960w, https://files.keepingcurrentmatters.com/wp-content/uploads/2022/10/03144108/20221004-NM-Eng-1-300x225.png 300w, https://files.keepingcurrentmatters.com/wp-content/uploads/2022/10/03144108/20221004-NM-Eng-1-768x576.png 768w" data-srcset="" sizes="(max-width: 550px) 100vw, 550px" /></a>
As the chart shows, as rates go up, the amount you can afford to borrow decreases and that may mean you have to look at homes at a different price point. That’s why it’s important to work with a <a href="https://www.keepingcurrentmatters.com/2022/09/09/why-its-so-important-to-hire-a-pro-infographic/">real estate advisor</a> to understand how mortgage rates impact your monthly mortgage payment at various home loan amounts.
Are Mortgage Rates Going To Go Down?
The rise in mortgage rates and the resulting decrease in purchasing power may leave you wondering if you should wait for rates to go down before making your purchase. Realtor.com <a href="https://www.realtor.com/news/trends/column-homebuyers-have-hard-the-bad-news-heres-the-good/">says</a> this about where rates could go from here:
“Many homebuyers likely winced . . . upon hearing that the Federal Reserve yet again boosted its short-term interest rates by three-quarters of a percentage point—a move that’s pushing mortgage rates through the roof. And the already high rates are just going to get higher.”
So, if you’re waiting for mortgage rates to drop, you may be waiting for a while as the Federal Reserve works to get <a href="https://www.keepingcurrentmatters.com/2022/09/27/how-an-expert-can-help-you-understand-inflation-mortgage-rates/">inflation</a> under control.
And if you’re considering renting as your alternative while you wait it out, remember that’s going to get more expensive with time too. As Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), <a href="https://www.nar.realtor/blogs/economists-outlook/instant-reaction-mortgage-rates-september-15-2022">says</a>:
“There is no doubt that these higher rates hurt housing affordability. Nevertheless, apart from borrowing costs, rents additionally rose at their highest pace in nearly four decades.”
Basically, it is true that it costs more to buy a home today than it did last year, but the same is true for renting. This means, either way, you’re going to be paying more. The difference is, with homeownership, you’re also gaining <a href="https://www.keepingcurrentmatters.com/2022/09/20/watching-the-stock-market-check-the-value-of-your-home-for-good-news/">equity</a> over time which will help grow your <a href="https://www.keepingcurrentmatters.com/2022/09/06/how-owning-a-home-builds-your-net-worth/">net worth</a>. The question now becomes: what makes more sense for you?
Bottom Line
Each person’s situation is unique. To make the best decision for you, let's connect to explore your options.2022-10-06T15:15:00-07:002022-10-06T17:19:51-07:00Jacob Sanderstag:jacobsandershomes.com,2012-09-20:5026How an Expert Can Help You Understand Inflation & Mortgage RatesIf you’re following today’s housing market, you know two of the top issues consumers face are inflation and mortgage rates. Let’s take a look at each one.
Inflation and the Housing Market
This year, <a href="https://www.keepingcurrentmatters.com/2022/05/20/dont-let-rising-inflation-delay-your-homeownership-plans-infographic/">inflation</a> reached a high not seen in <a href="https://www.cnbc.com/2022/06/10/consumer-price-index-may-2022.html">forty years</a>. For the average consumer, you probably felt the pinch at the gas pump and in the grocery store. It may have even impacted your ability to save money to buy a home.
While the Federal Reserve is working hard to lower inflation, the <a href="https://www.nar.realtor/blogs/economists-outlook/instant-reaction-consumer-price-index-september-13-2022">August data</a> shows the inflation rate was still higher than expected. This news impacted the stock market and fueled conversations about a recession. It also played a role in the Federal Reserve’s decision to raise the Federal Funds Rate last week. As Bankrate <a href="https://www.bankrate.com/real-estate/how-fed-rate-hike-affects-housing/">says</a>:
“. . . the Fed has raised rates again, announcing yet another three-quarter-point hike on September 21 . . . The hikes are designed to cool an economy that has been on fire. . .”
While their actions don’t directly dictate what happens with mortgage rates, their decisions have contributed to the intentional cooldown in the housing market. A recent article from Fortune <a href="https://fortune.com/2022/08/15/falling-home-prices-to-hit-these-housing-markets-in-2023-and-2024/">explains</a>:
“As the Federal Reserve moved into inflation-fighting mode, financial markets quickly put upward pressure on mortgage rates. Those elevated mortgage rates . . . coupled with sky-high home prices, threw cold water onto the housing boom.”
The Impact on Rising Mortgage Rates
Over the past few months, mortgage rates have fluctuated in light of growing economic pressures. Most recently, the average 30-year fixed <a href="http://www.freddiemac.com/pmms/pmms_archives.html">mortgage rate</a> according to Freddie Mac ticked above 6% for the first time in well over a decade (see graph below):
<a href="https://files.keepingcurrentmatters.com/wp-content/uploads/2022/09/28163914/20220927-NM-Eng-1-.png" class="lightbox-added aligncenter"><img loading="lazy" class="aligncenter wp-image-2085228 lazy-loaded" src="https://files.keepingcurrentmatters.com/wp-content/uploads/2022/09/28163914/20220927-NM-Eng-1-.png" data-lazy-type="image" data-src="https://files.keepingcurrentmatters.com/wp-content/uploads/2022/09/28163914/20220927-NM-Eng-1-.png" alt="How an Expert Can Help You Understand Inflation & Mortgage Rates | Keeping Current Matters" width="550" height="413" srcset="https://files.keepingcurrentmatters.com/wp-content/uploads/2022/09/28163914/20220927-NM-Eng-1-.png 960w, https://files.keepingcurrentmatters.com/wp-content/uploads/2022/09/28163914/20220927-NM-Eng-1--300x225.png 300w, https://files.keepingcurrentmatters.com/wp-content/uploads/2022/09/28163914/20220927-NM-Eng-1--768x576.png 768w" data-srcset="" sizes="(max-width: 550px) 100vw, 550px" /></a>
The mortgage rate increases this year are the big reason <a href="https://www.keepingcurrentmatters.com/2022/09/19/will-my-house-still-sell-in-todays-market/">buyer demand</a> has pulled back in recent months. Basically, as rates (and home prices) rose, so did the cost of buying a home. That pushed on <a href="https://www.keepingcurrentmatters.com/2022/09/13/three-things-buyers-can-do-in-todays-housing-market/">affordability</a> and priced some buyers out of the market, so home sales slowed and the <a href="https://www.keepingcurrentmatters.com/2022/08/25/why-you-may-want-to-start-your-home-search-today/">inventory</a> of homes for sale grew as a result.
Where Experts Say Rates and Inflation Will Go from Here
Moving forward, both of these factors will continue to impact the housing market. A <a href="https://www.cnet.com/personal-finance/mortgages/mortgage-rates-on-sep-26-2022-rates-tick-up/">recent article</a> from CNET puts the relationship between inflation and mortgage rates in simple terms:
“As a general rule, when inflation is low, mortgage rates tend to be lower. When inflation is high, rates tend to be higher.”
Sam Khater, Chief Economist at Freddie Mac, has this to <a href="https://freddiemac.gcs-web.com/node/25711/pdf">say</a> about where rates may go from here:
“Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth. The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, . . .”
While there’s no way to say with certainty where mortgage rates will go from here, there is something you can do to stay informed, and that’s connect with a trusted real estate advisor. They keep their pulse on what’s happening today and help you understand what the experts are projecting. They can provide you with the <a href="https://www.keepingcurrentmatters.com/2022/08/29/a-trusted-real-estate-advisor-provides-expert-advice/">best advice</a> possible.
Bottom Line
Rising inflation and higher mortgage rates have had a clear impact on housing. For expert insights on the latest trends in the housing market and what they mean for you, Let's connect to discuss it.
2022-09-28T18:30:00-07:002022-09-29T07:09:01-07:00Jacob Sanders