Weekly Mortgage Rate Update – Mortgage Rates Continue to Climb on Inflation Concerns

Per Freddie Mac:

Mortgage rates surged as the 30-year fixed-rate mortgage moved up more than half a percentage point, marking the largest one-week increase in our survey since 1987. These higher rates are the result of a shift in expectations about inflation and the course of monetary policy. Higher mortgage rates will lead to moderation from the blistering pace of housing activity that we have experienced coming out of the pandemic, ultimately resulting in a more balanced housing market.

Some key takeaways:

  • If you have a pre-approval please, please, please update it for you situation and current rates.  At the least, it may make you feel comfortable with the new market.  At the most, it could help avert disaster with a payment that you cannot handle.  Remember. rates have almost DOUBLED since the beginning of the year.
  • If you are floating a rate on a deal, don’t.  Assume that rates will continue to rise with possible short stints of stability.  More and more lenders are rolling out long term locks with terms up to 180-days.  It may cost more, but it will give you piece of mind.  Some even have “float down” or renegotiation policies if rates do drop for some reason.  Granted these do have requirements for rates to drop a certain  amount, but it still gives you good options.
  • If you are a realtor, see bullet one.  If you have pre-approved clients, highly encourage them to reassess.
  • Pick a good lender who can close on time and make sure that you are diligent in answering information and document requests.  When you are locked and in the midst of your deal, every day counts.  Extensions can be expensive and limited in number.  If you use all of your possible extension, your rate would be at market or possibly worst case.  Again it will cost you money.
  • As with last week’s commentary, this environment continues to put downward pressure on home prices.  I am  now reading descriptions of the market in terms of free fall or plummeting values.  For sellers, your time may be running out to get maximum gain on your sale.  For buyers, there may be some good deals emerging.  As always, if your HAVE to sell or refinance, such as divorce.  Do not wait.