Last week brought big news and significant mortgage rate increases. Let’s cover the Fed’s announcement and more in this week’s Mortgage Monday update!
Rates Update
For the week ending March 17, Freddie Mac reported significant mortgage rate increases following the Federal Reserve’s meeting on Wednesday. For the first time since 2018, the Fed announced that interest rates will be rising by 0.25 percentage points – meaning mortgage rates will also rise – and that future increases will come over the rest of this year with each proceeding Fed meeting.
According to Freddie’s weekly rate survey, this announcement caused some mortgage rates to jump to their highest levels since May 2019. The average 30-year fixed-rate mortgage is well beyond four percent now, which should be a red flag to any borrowers considering a home purchase. We’ve said before that in the current market, it would be best to buy a home sooner than later; the Fed’s announcement last week has only confirmed this sentiment.
To get started, contact a Total Mortgage loan officer or apply now!
Older, but Still Important News
Let’s cover some older industry news that has affected buyers since the start of this year.
- At the start of February, the Federal Housing Finance Agency (FHFA) lifted its restrictions on borrowers with self-employment income. These were originally put in place in response to the pandemic but have since been removed, offering borrowers greater opportunities in an already competitive market. The same credit and income requirements may apply, but home financing is now generally more accessible for the self-employed.
- Coming soon: The Federal Housing Finance Agency (FHFA) announced upcoming fee increases (effective April 1, 2022) for certain Fannie Mae and Freddie Mac home loans. These increases will ultimately depend on each product’s loan-to-value ratio. “High-balance” loans qualify as any that go above the conforming baseline limit introduced on January 1.
To learn more about any of these recent developments, contact your Total Mortgage loan officer today.
In Closing
As expected, the Federal Reserve’s announcement of higher rates was last week’s biggest news and will continue to affect the market through the rest of the year. Our prediction: mortgage applications will likely increase with a correlating decline in refinances. Borrowers will want to lock in a rate now before the Fed inevitably raises them again, reducing affordability as they combat inflation. At the same time, refinancing will become less feasible as lower-rate options begin to disappear and give way for a true purchase market this spring.
If you’re on the fence about pursuing a home purchase, contact us or apply now! Experts have been predicting a return to pre-pandemic markets for some time and last week was a major step in that direction. Prospective buyers will need to be proactive to be successful – but for now, stay tuned for our next update and enjoy the rest of your week.
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Source: totalmortgage.com