Home News I’m the chief economist of a mortgage firm that has funded more than $100 billion in loans. These are 3 things to know about the housing market now.

I’m the chief economist of a mortgage firm that has funded more than $100 billion in loans. These are 3 things to know about the housing market now.

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Cameron Findlay

With home prices and mortgage rates rising and home inventories still severely constrained, many buyers are wondering:And what do you need to know about the current housing market if you want to buy? series We ask leading economists and real estate experts for their take on the current housing market. We speak to Cameron Findlay, chief economist and EVP of Capital Markets at AmeriSave Mortgage Corporation, which has funded more than $115 billion in loans since its inception in 2000. Findlay has spent over 20 years in the mortgage industry. Previously, he was President and Head of Capital Markets at mortgage lender LoanSnap, Chief of LendingTree, where he was the Economist, and Chief of Capital Markets at Discover Financial Services, where he was the Economist and Head of Secondary. He asked him what homebuyers should know about the market right now. (See the lowest mortgage rates you can get here.)

Mortgage rates are rising, but put that in perspective

Interest rates have been rising this year and are unlikely to drop significantly any time soon, Findlay said. In fact, from early 2022 to now, interest rates have risen from just over 3% to about 6%, his Bankrate data shows. “If you want to buy a home, the longer you wait, the more money and purchasing power you could be sacrificing,” says Findlay.

That said, it’s impossible to predict the future, but if you’re worried about rate hikes, you might want to consider locking interest rates. These are usually “today’s rates he can lock in for 90 days,” explains Findlay.indeed other Expert With inflation playing a major role in the trajectory of interest rates, we are debating what will happen to mortgage rates in the coming months.

Interest rates have risen significantly this year, notes Findlay: “When inflation was this high in the early 1980s, his interest rate was 18%, and more recently, in 2000, he was at 8.5%,” says Findlay. (See the lowest mortgage rates you can get here.)

Don’t expect home prices to drop significantly anytime soon

With more than 3 million homes missing in the United States, according to Freddie Mac data, new home construction has slowed significantly as inventory continues to be in short supply. That means that even if buyer demand starts to falter, prices aren’t likely to drop significantly any time soon. “In some markets, if interest rates continue to rise, prices may plateau, but if you’re looking to stay on the sidelines until prices start to fall, you may be on your way.” says Findlay. Other economists agree. flat If the housing market cools down a bit, house prices won’t drop significantly.

Shop smart, as interest rates “variate wildly” between lenders and loan types

Market volatility has resulted in a wider range of mortgage rates among lenders than usual, says Findlay. “Rates now vary wildly from provider to provider, which can add up to thousands of dollars in borrowing costs,” he says. “For every 1 percentage point increase in mortgage rates, the borrower of the $300,000 loan pays an additional $190 per month. , will be more than $67,000,” he says Findlay. (See the lowest mortgage rates you can get here.)

Findlay said shoppers may want to consider different types of loans. “As a rule of thumb, if you plan to stay for less than seven years, you may want to consider higher loan rates and larger rebates to cover closing costs and moving costs.” If you plan to keep it for a long time, less than seven years, you should choose a lower rate,” says Findlay. Rebate funds can be used to offset fees and cover non-lender-related closing costs, as well as upfront expenses such as property taxes and insurance premiums. If not, you can also consider an adjustable rate mortgage (ARM), which can save you money, as long as you plan to sell it within five to seven years.

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