Home News Real estate expert advises prospective home buyers not to just look at 30-year fixed-mortgage rate

Real estate expert advises prospective home buyers not to just look at 30-year fixed-mortgage rate

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Samantha DeBianchi, founder of DeBianchi Real Estate, encouraged homebuyers to look beyond 30-year fixed mortgage rates and consider other options when considering a home purchase.

speak at “Morning with MariaOn Monday, real estate experts recommended “buying out mortgage rates” because the 30-year fixed rate is above 5%.

When DeBianchi bought the house about five months ago when rates on 30-year fixed mortgages topped 5%, he did his research and “could lock in 3.375 on a 10-year ARM (adjustable rate mortgage).” said. .”

“A 10-year ARM variable rate mortgage is not for everyone,” she pointed out.

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DeBianchi then explained that it could be a great option “if you feel you have the financial ability to pay it back in 10 years, or if you think you’ll be living there for 10 years.” Did.

According to recent data from mortgage lender Freddie Mac, the average interest rate for a 30-year fixed-rate mortgage rose to 5.22% in the week ending Aug. 11. (iStock/iStock)

She also advised buyers to think that they could refinance within that decade, and that they could get even lower interest rates up to the mortgage rate.

“We strongly advise against looking only at 30-year fixed mortgages,” she stressed, noting that 15-year fixed mortgage rates are now lower than 30-year fixed mortgage rates, staying at less than 5%. I mentioned that.

“So it’s very important to not just maintain that number,” she said. please.”

DeBianchi provides insight just ahead of reveals that confidence among builders in the U.S. housing market plummeted more than expected in August, dropping to the lowest level since the start of the COVID-19 pandemic. did. return.

The National Association of Home Builders/Wells Fargo Home Market Index, which measures performance in the single-family home market, rose to 49 for the eighth straight month, marking the worst growth in the housing market since the 2008 financial crisis.

The index ranges from 0 to 100, with values ​​above 50 indicating positive sentiment. A number above 80 indicates strong demand. The gauge has not entered negative territory since May 2020, when it dropped sharply but briefly.

The index has dropped significantly from 80 just a year ago. In November 2020, he hit a 35-year high of 90. This was aided by record-low interest rates, as well as the cash-rich and enthusiastic purchases of American homebuyers. People started flocking to suburbs for more space during the pandemic.

The interest rate-sensitive housing market has started to cool significantly in recent months. federal reserve We are tightening policy at the fastest pace in 30 years. Policymakers have already approved rate hikes of 75 basis points in both June and July.

30-year fixed average interest rate interest rate mortgage Interest rates rose to 5.22% in the week ending Aug. 11, according to recent data from mortgage lender Freddie Mac. This is significantly higher than just a year ago when interest rates were his 2.86%.

“The typical mortgage has gone up about $500 a month since January,” said Debianchi from South Florida.


“The market is slowly cooling off and we’re feeling it here. We’re feeling it across the country,” she continued, adding sentiment among many realtors she spoke to in various markets. I pointed out something.

Megan Heney of Fox Business contributed to this report.

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