The Veterans United Home Loans Amphitheater announced new regulations for the upcoming concert season.
VIRGINIA BEACH, Va. — Concert season is just around the corner, and music lovers heading to the amphitheater in Virginia Beach should prepare for new regulations that have been rolled out since last summer.
In an Instagram post in November, the Veterans United Home Loans Amphitheater announced concert-goers could no longer bring their own lawn chairs but could instead opt to rent some from the venue. According to the announcement, guests could reserve chairs or a blanket ahead of time and pick them up the day of the event.
Concertgoers like Taylor Stewart and Betty Spencer say they are excited for this new venue.
“If we have a blanket or something, that suffices. I’ll stand or whatever. I don’t feel like I need to sit in a lawn chair. ” Stewart said.
“In the summertime when it’s warm, it’s nice to be out on the lawn with everybody mingling and sitting on the moon listening to music,” Spencer said.
Ariette Jenisca says she hasn’t been to the amphitheater in years but the new policy wouldn’t deter her from coming back for a show.
“It’s convenient because now, I don’t have to go with the lawn chair. I can just rent one sit down. I can have a good time and leave empty-handed,” Jenisca said.
The amphitheater claims the change will improve entry into the venue and security.
The venue, which can hold 20,000 fans, features two seating areas: the fixed seating area beneath a canopy and a lawn area where guests can stand or set up chairs.
The amphitheater, which was previously called the Farm Bureau Live, was opened in 1996.
Daily average mortgage rates jumped to their highest level since last November after last week’s disappointing inflation report
SEATTLE, April 18, 2024–(BUSINESS WIRE)–(NASDAQ: RDFN) —The median U.S. home-sale price increased 5% from a year earlier during the four weeks ending April 14, bringing it to $380,250—just $3,095 shy of June 2022’s all-time high. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
The average daily mortgage rate this week surpassed 7.4%, the highest level since last November, after a hotter-than-expected inflation report and the Fed’s confirmation that interest-rate cuts will be delayed. The combination of high mortgage rates and prices have brought homebuyers’ median monthly housing payment to a record $2,775, up 11% year over year.
There are signals that buyers are out there touring homes despite rising rates. Mortgage-purchase applications are up 5% week over week, and Redfin’s Homebuyer Demand Index—a measure of requests for tours and other buying services from Redfin agents—is near its highest level in seven months. Chen Zhao, Redfin’s economic research lead, said some house hunters are hoping to buy now because they’re concerned rates could rise more, and others have grown accustomed to elevated rates and pushed down their home-price budget accordingly.
“Home sales are slower than usual, but there are still people buying and selling because if not now, when?” said Connie Durnal, a Redfin Premier agent in Dallas. “I’ve had a few prospective buyers touring homes for the last several years, since mortgage rates started going up, and they wish they would have bought last year because prices and rates are even higher now. My advice to them: If you can afford to and you find a house you love, buy now. There’s no guarantee that rates will come down soon.”
For more of Redfin economists’ takes on the housing market, including how current financial events are impacting mortgage rates, please visit Redfin’s “From Our Economists” page.
Leading indicators
Indicators of homebuying demand and activity
Value (if applicable)
Recent change
Year-over-year change
Source
Daily average 30-year fixed mortgage rate
7.41% (April 17)
Up from 7% one month earlier; highest level since November 2023
Increased 5% from a week earlier (as of week ending April 12)
Down 10%
Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)
Up 8% from a month earlier (as of week ending April 14)
Down 11%
Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Touring activity
Up 33% from the start of the year (as of April 14)
At this time last year, it was up 23% from the start of 2023
ShowingTime, a home touring technology company
Google searches for “home for sale”
Unchanged from a month earlier (as of April 14)
Down 17%
Google Trends
Key housing-market data
U.S. highlights: Four weeks ending April 14, 2024
Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
Four weeks ending April 14, 2024
Year-over-year change
Notes
Median sale price
$380,250
4.7%
Median asking price
$413,225
6.4%
Biggest increase since Oct. 2022; all-time high
Median monthly mortgage payment
$2,775 at a 6.88% mortgage rate
10.6%
All-time high
Pending sales
86,086
-2.3%
New listings
93,332
10.8%
Active listings
832,748
9.6%
Months of supply
3.3 months
+0.4 pts.
4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions.
Share of homes off market in two weeks
42.6%
Down from 44%
Median days on market
35
-1 day
Share of homes sold above list price
29.2%
Essentially unchanged
Share of homes with a price drop
5.9%
+1.6 pts.
Average sale-to-list price ratio
99.2%
+0.2 pts.
Metro-level highlights: Four weeks ending April 14, 2024
Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
Metros with biggest year-over-year increases
Metros with biggest year-over-year decreases
Notes
Median sale price
Anaheim, CA (24.8%)
Providence, RI (14.6%)
Nassau County, NY (14.3%)
West Palm Beach, FL (13.5%)
New Brunswick, NJ (13.1%)
San Antonio, TX (-1%)
Declined in just 1 metro
Pending sales
San Jose, CA (25.6%)
San Francisco (11.2%)
Oakland, CA (7.1%)
Columbus, OH (6.7%)
Seattle (6.4%)
Nassau County, NY (-14.9%)
Atlanta (-13.6%)
Houston (-11.6%)
Riverside, CA (-10.8%)
Fort Lauderdale, FL (-10%)
Increased in 14 metros
New listings
San Jose, CA (46.6%)
Sacramento, CA (27.6%)
Phoenix (27.4%)
Jacksonville, FL (27.2%)
Dallas (22.9%)
Newark, NJ (-12.4%)
Providence, RI (-6.3%)
Milwaukee (-4.6%)
Chicago (-4.5%)
Detroit (-3.1%)
Declined in 9 metros
To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-home-prices-mortgage-rates-increase
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country’s #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we’ve saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin’s press release distribution list, email [email protected]. To view Redfin’s press center, click here.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240418348073/en/
Mortgage rates jumped for all types of loans compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans edged higher.
While mortgage rates are still on track to gradually come down this year, the path might be bumpy. Lenders price mortgages based on many variables, but overall, fixed mortgage rates follow the 10-year Treasury yield, which moves as investor appetite fluctuates with the state of the economy and Federal Reserve decisions.
The Fed indicated it’d cut rates in 2024, but policymakers held off at its latest meeting, citing the need for more promising economic data. The Fed has been working to bring inflation back to its 2 percent target since 2022.
“The Fed is not in a hurry to start cutting interest rates as the progress toward 2 percent inflation has encountered some turbulence,” says Greg McBride, CFA, chief financial analyst for Bankrate.
For now, the Fed expects to issue three rate cuts in 2024. When that happens, the rates on a variety of financial products, including mortgages, should follow suit.
Whether mortgage rates move up or down, though, it’s tough to time the market. Often, the decision to buy a home comes down to needs. Depending on your situation, it might make sense to take a higher rate now and hope to refinance later — buying a home at today’s prices rather than a higher price in the future, while building equity that much sooner.
Rates last updated April 15, 2024.
The rates listed above are averages based on the assumptions here. Actual rates displayed across the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Monday, April 15th, 2024 at 7:30 a.m.
30-year mortgage rate climbs, +0.08%
Today’s average rate for the benchmark 30-year fixed mortgage is 7.05 percent, up 8 basis points from a week ago. A month ago, the average rate on a 30-year fixed mortgage was lower, at 6.90 percent.
At the current average rate, you’ll pay $668.66 per month in principal and interest for every $100,000 you borrow. That’s $5.37 higher compared with last week.
15-year mortgage rate moves higher, +0.16%
The average rate for a 15-year fixed mortgage is 6.54 percent, up 16 basis points over the last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost approximately $873 per $100,000 borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much faster.
5/1 ARM rate increases, +0.02%
The average rate on a 5/1 adjustable rate mortgage is 6.58 percent, up 2 basis points over the last 7 days.
Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. To put it another way, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These loan types are best for people who expect to refinance or sell before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.
While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.
Monthly payments on a 5/1 ARM at 6.58 percent would cost about $637 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.
The average rate for the benchmark jumbo mortgage is 7.21 percent, up 12 basis points from a week ago. Last month on the 15th, the average rate for jumbo mortgages was below that at 7.04 percent.
At today’s average jumbo rate, you’ll pay principal and interest of $679.47 for every $100,000 you borrow. That’s up $8.11 from what it would have been last week.
Refinance rates
30-year fixed-rate refinance increases, +0.08%
The average 30-year fixed-refinance rate is 7.07 percent, up 8 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was lower at 6.85 percent.
At the current average rate, you’ll pay $670.01 per month in principal and interest for every $100,000 you borrow. That’s an increase of $5.38 over what you would have paid last week.
Where are mortgage rates heading?
With mortgage rates buffeted by many factors, it’s impossible to predict exactly when they’ll rise or fall. With the Fed still aiming for three rate cuts this year, it’s possible we’ll see lower rates sooner rather than later.
Keep in mind: The rates on 30-year mortgages mostly follow the 10-year Treasury, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves.
These broader factors influence overall rate movement. As a borrower, you could be quoted a higher or lower rate compared to the trend.
What today’s rates mean for your mortgage
While mortgage rates change daily, it’s unlikely we’ll see rates back at 3 percent anytime soon. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.
You could save serious money on interest by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.
“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”
More on current mortgage rates
Methodology
Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).
The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.
Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.
Average mortgage rates edged higher yesterday. It was a modest increase by any standards but tiny by comparison with Wednesday’s big jump.
First thing, it was looking as if mortgage rates today could fall. But that could change later in the day.
Current mortgage and refinance rates
Find your lowest rate. Start here
Our table is having technical problems. But we’re working hard to fix them.
Program
Mortgage Rate
APR*
Change
30-year fixed VA
7.222%
7.262%
+0.05
Conventional 20-year fixed
7.007%
7.058%
+0.07
Conventional 10-year fixed
6.51%
6.584%
+0.09
Conventional 30-year fixed
7.127%
7.173%
+0.07
30-year fixed FHA
7.056%
7.1%
+0.09
Conventional 15-year fixed
6.64%
6.713%
+0.1
5/1 ARM Conventional
6.785%
7.888%
+0.08
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions See our rate assumptions here.
Should you lock your mortgage rate today?
Markets have turned gloomy over the prospects of the Federal Reserve cutting general interest rates over the next few months. And that’s been pushing mortgage rates higher.
So, for now, my personal rate lock recommendations remain:
LOCK if closing in 7 days
LOCK if closing in 15 days
LOCK if closing in 30 days
LOCK if closing in 45 days
LOCKif closing in 60days
However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So, let your gut and your own tolerance for risk help guide you.
>Related: 7 Tips to get the best refinance rate
Market data affecting today’s mortgage rates
Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data are mostly compared with roughly the same time the business day before, so much of the movement will often have happened in the previous session. The numbers are:
The yield on 10-year Treasury notes fell to 4.50% from 4.55%. (Good for mortgage rates.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
Major stock indexes were falling this morning. (Good for mortgage rates.) When investors buy shares, they’re often selling bonds, which pushes those prices down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
Oil prices increased to $87.42 from $85.57 a barrel. (Bad for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
Goldprices climbed to $2,414 from $2,361 an ounce. (Good for mortgage rates*.) It is generally better for rates when gold prices rise and worse when they fall. Because gold tends to rise when investors worry about the economy.
CNN Business Fear & Greed index — fell to 51 from 54 out of 100. (Good for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So, lower readings are often better than higher ones
*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.
Caveats about markets and rates
Before the pandemic, post-pandemic upheavals, and war in Ukraine, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.
So, use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to decrease. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.
Find your lowest rate. Start here
What’s driving mortgage rates today?
Today
Two economic reports are scheduled for this morning.
The March import price index (IPI) landed at 8:30 a.m. Eastern. And that would normally be bad for mortgage rates. Markets had been expecting it to hold steady at 0.3% and it came in at 0.4%.
So, how come mortgage rates were falling first thing? Well, it’s too early to be sure. But those rates often move in the opposite direction after a sharp movement one way or the other. That’s simply markets reflecting on the change and deciding they over-reacted.
This morning’s other report isn’t due until 10 a.m. Eastern. And that means I won’t have time before my deadline to assess its likely impact on markets. They were expecting the preliminary consumer sentiment index for April to improve slightly to 79.9% from 79.4%.
A lower figure may help mortgage rates to fall while a higher one could push them upward. But this is one of those reports that rarely move those rates far unless they contain shockingly good or bad data.
Mortgage rates might also be affected by earnings reports later from three of the biggest U.S. banks, JPMorgan Chase, Wells Fargo and Citigroup. If they all tell a really positive story, stock market reactions could spill over into the bond market that largely determines mortgage rates.
Next week
We’ve had April’s two most important reports over the last six days. And, taken together, they were pretty bad for mortgage rates.
Next week’s reports aren’t typically as influential by a long way. But a couple of them (retail sales and industrial production) could move mortgage rates higher if they feed markets’ current pessimism over Fed rate cuts — or push them downward if they contradict it.
Don’t forget you can always learn more about what’s driving mortgage rates in the most recent weekend edition of this daily report. These provide a more detailed analysis of what’s happening. They are published each Saturday morning soon after 10 a.m. (ET) and include a preview of the following week.
Recent trends
According to Freddie Mac’s archives, the weekly all-time lowest rate for 30-year, fixed-rate mortgages was set on Jan. 7, 2021, when it stood at 2.65%. The weekly all-time high was 18.63% on Sep. 10, 1981.
Freddie’s Apr. 11 report put that same weekly average at 6.88%, up from the previous week’s 6.82%. But note that Freddie’s data are almost always out of date by the time it announces its weekly figures.
Expert forecasts for mortgage rates
Looking further ahead, Fannie Mae and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.
And here are their rate forecasts for the four quarters of 2024 (Q1/24, Q2/24 Q3/24 and Q4/24).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on Mar. 19 and the MBA’s on Mar. 22.
Forecaster
Q1/24
Q2/24
Q3/24
Q4/24
Fannie Mae
6.7%
6.7%
6.6%
6.4%
MBA
6.8%
6.6%
6.3%
6.1%
Of course, given so many unknowables, both these forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.
Important notes on today’s mortgage rates
Here are some things you need to know:
Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care’
Only “top-tier” borrowers (with stellar credit scores, big down payments, and very healthy finances) get the ultralow mortgage rates you’ll see advertised
Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the broader trend over time
When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
Refinance rates are typically close to those for purchases.
A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
Find your lowest mortgage rate today
You should comparison shop widely, no matter what sort of mortgage you want. Federal regulator the Consumer Financial Protection Bureau found in May 2023:
“Mortgage borrowers are paying around $100 a month more depending on which lender they choose, for the same type of loan and the same consumer characteristics (such as credit score and down payment).”
In other words, over the lifetime of a 30-year loan, homebuyers who don’t bother to get quotes from multiple lenders risk losing an average of $36,000. What could you do with that sort of money?
Verify your new rate
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.
How your mortgage interest rate is determined
Mortgage and refinance rates vary a lot depending on each borrower’s unique situation.
Factors that determine your mortgage interest rate include:
Overall strength of the economy — A strong economy usually means higher rates, while a weaker one can push current mortgage rates down to promote borrowing
Lender capacity — When a lender is very busy, it will increase rates to deter new business and give its loan officers some breathing room
Property type (condo, single-family, town house, etc.) — A primary residence, meaning a home you plan to live in full time, will have a lower interest rate. Investment properties, second homes, and vacation homes have higher mortgage rates
Loan-to-value ratio (determined by your down payment) — Your loan-to-value ratio (LTV) compares your loan amount to the value of the home. A lower LTV, meaning a bigger down payment, gets you a lower mortgage rate
Debt-To-Income ratio — This number compares your total monthly debts to your pretax income. The more debt you currently have, the less room you’ll have in your budget for a mortgage payment
Loan term — Loans with a shorter term (like a 15-year mortgage) typically have lower rates than a 30-year loan term
Borrower’s credit score — Typically the higher your credit score is, the lower your mortgage rate, and vice versa
Mortgage discount points — Borrowers have the option to buy discount points or ‘mortgage points’ at closing. These let you pay money upfront to lower your interest rate
Remember, every mortgage lender weighs these factors a little differently.
To find the best rate for your situation, you’ll want to get personalized estimates from a few different lenders.
Verify your new rate. Start here
Are refinance rates the same as mortgage rates?
Rates for a home purchase and mortgage refinance are often similar.
However, some lenders will charge more for a refinance under certain circumstances.
Typically when rates fall, homeowners rush to refinance. They see an opportunity to lock in a lower rate and payment for the rest of their loan.
This creates a tidal wave of new work for mortgage lenders.
Unfortunately, some lenders don’t have the capacity or crew to process a large number of refinance loan applications.
In this case, a lender might raise its rates to deter new business and give loan officers time to process loans currently in the pipeline.
Also, cashing out equity can result in a higher rate when refinancing.
Cash-out refinances pose a greater risk for mortgage lenders, so they’re often priced higher than new home purchases and rate-term refinances.
Check your refinance rates today. Start here
How to get the lowest mortgage or refinance rate
Since rates can vary, always shop around when buying a house or refinancing a mortgage.
Comparison shopping can potentially save thousands, even tens of thousands of dollars over the life of your loan.
Here are a few tips to keep in mind:
1. Get multiple quotes
Many borrowers make the mistake of accepting the first mortgage or refinance offer they receive.
Some simply go with the bank they use for checking and savings since that can seem easiest.
However, your bank might not offer the best mortgage deal for you. And if you’re refinancing, your financial situation may have changed enough that your current lender is no longer your best bet.
So get multiple quotes from at least three different lenders to find the right one for you.
2. Compare Loan Estimates
When shopping for a mortgage or refinance, lenders will provide a Loan Estimate that breaks down important costs associated with the loan.
You’ll want to read these Loan Estimates carefully and compare costs and fees line-by-line, including:
Interest rate
Annual percentage rate (APR)
Monthly mortgage payment
Loan origination fees
Rate lock fees
Closing costs
Remember, the lowest interest rate isn’t always the best deal.
Annual percentage rate (APR) can help you compare the ‘real’ cost of two loans. It estimates your total yearly cost including interest and fees.
Also, pay close attention to your closing costs.
Some lenders may bring their rates down by charging more upfront via discount points. These can add thousands to your out-of-pocket costs.
3. Negotiate your mortgage rate
You can also negotiate your mortgage rate to get a better deal.
Let’s say you get loan estimates from two lenders. Lender A offers the better rate, but you prefer your loan terms from Lender B. Talk to Lender B and see if they can beat the former’s pricing.
You might be surprised to find that a lender is willing to give you a lower interest rate in order to keep your business.
And if they’re not, keep shopping — there’s a good chance someone will.
Fixed-rate mortgage vs. adjustable-rate mortgage: Which is right for you?
Mortgage borrowers can choose between a fixed-rate mortgage and an adjustable-rate mortgage (ARM).
Fixed-rate mortgages (FRMs) have interest rates that never change unless you decide to refinance. This results in predictable monthly payments and stability over the life of your loan.
Adjustable-rate loans have a low interest rate that’s fixed for a set number of years (typically five or seven). After the initial fixed-rate period, the interest rate adjusts every year based on market conditions.
With each rate adjustment, a borrower’s mortgage rate can either increase, decrease, or stay the same. These loans are unpredictable since monthly payments can change each year.
Adjustable-rate mortgages are fitting for borrowers who expect to move before their first rate adjustment, or who can afford a higher future payment.
In most other cases, a fixed-rate mortgage is typically the safer and better choice.
Remember, if rates drop sharply, you are free to refinance and lock in a lower rate and payment later on.
How your credit score affects your mortgage rate
You don’t need a high credit score to qualify for a home purchase or refinance, but your credit score will affect your rate.
This is because credit history determines risk level.
Historically speaking, borrowers with higher credit scores are less likely to default on their mortgages, so they qualify for lower rates.
So, for the best rate, aim for a credit score of 720 or higher.
Mortgage programs that don’t require a high score include:
Conventional home loans — minimum 620 credit score
FHA loans — minimum 500 credit score (with a 10% down payment) or 580 (with a 3.5% down payment)
VA loans — no minimum credit score, but 620 is common
USDA loans — minimum 640 credit score
Ideally, you want to check your credit report and score at least 6 months before applying for a mortgage. This gives you time to sort out any errors and make sure your score is as high as possible.
If you’re ready to apply now, it’s still worth checking so you have a good idea of what loan programs you might qualify for and how your score will affect your rate.
You can get your credit report from AnnualCreditReport.com and your score from MyFico.com.
How big of a down payment do I need?
Nowadays, mortgage programs don’t require the conventional 20 percent down.
Indeed, first-time home buyers put only 6 percent down on average.
Down payment minimums vary depending on the loan program. For example:
Conventional home loans require a down payment between 3% and 5%
FHA loans require 3.5% down
VA and USDA loans allow zero down payment
Jumbo loans typically require at least 5% to 10% down
Keep in mind, a higher down payment reduces your risk as a borrower and helps you negotiate a better mortgage rate.
If you are able to make a 20 percent down payment, you can avoid paying for mortgage insurance.
This is an added cost paid by the borrower, which protects their lender in case of default or foreclosure.
But a big down payment is not required.
For many people, it makes sense to make a smaller down payment in order to buy a house sooner and start building home equity.
Verify your new rate. Start here
Choosing the right type of home loan
No two mortgage loans are alike, so it’s important to know your options and choose the right type of mortgage.
The five main types of mortgages include:
Fixed-rate mortgage (FRM)
Your interest rate remains the same over the life of the loan. This is a good option for borrowers who expect to live in their homes long-term.
The most popular loan option is the 30-year mortgage, but 15- and 20-year terms are also commonly available.
Adjustable-rate mortgage (ARM)
Adjustable-rate loans have a fixed interest rate for the first few years. Then, your mortgage rate resets every year.
Your rate and payment can rise or fall annually depending on how the broader interest rate trends.
ARMs are ideal for borrowers who expect to move prior to their first rate adjustment (usually in 5 or 7 years).
For those who plan to stay in their home long-term, a fixed-rate mortgage is typically recommended.
Jumbo mortgage
A jumbo loan is a mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac.
In 2023, the conforming loan limit is $726,200 in most areas.
Jumbo loans are perfect for borrowers who need a larger loan to purchase a high-priced property, especially in big cities with high real estate values.
FHA mortgage
A government loan backed by the Federal Housing Administration for low- to moderate-income borrowers. FHA loans feature low credit score and down payment requirements.
VA mortgage
A government loan backed by the Department of Veterans Affairs. To be eligible, you must be active-duty military, a veteran, a Reservist or National Guard service member, or an eligible spouse.
VA loans allow no down payment and have exceptionally low mortgage rates.
USDA mortgage
USDA loans are a government program backed by the U.S. Department of Agriculture. They offer a no-down-payment solution for borrowers who purchase real estate in an eligible rural area. To qualify, your income must be at or below the local median.
Bank statement loan
Borrowers can qualify for a mortgage without tax returns, using their personal or business bank account as evidence of their financial circumstances. This is an option for self-employed or seasonally-employed borrowers.
Portfolio/Non-QM loan
These are mortgages that lenders don’t sell on the secondary mortgage market. And this gives lenders the flexibility to set their own guidelines.
Non-QM loans may have lower credit score requirements or offer low-down-payment options without mortgage insurance.
Choosing the right mortgage lender
The lender or loan program that’s right for one person might not be right for another.
Explore your options and then pick a loan based on your credit score, down payment, and financial goals, as well as local home prices.
Whether you’re getting a mortgage for a home purchase or a refinance, always shop around and compare rates and terms.
Typically, it only takes a few hours to get quotes from multiple lenders. And it could save you thousands in the long run.
Time to make a move? Let us find the right mortgage for you
Current mortgage rates methodology
We receive current mortgage rates each day from a network of mortgage lenders that offer home purchase and refinance loans. Those mortgage rates shown here are based on sample borrower profiles that vary by loan type. See our full loan assumptions here.
The Homium loans are currently live in Colorado, with plans to expand to other states. As part of securing the loan, homeowners commit a portion of their home’s price appreciation. For investors, i.e., those funding the loan, they receive a tokenized asset tracking the price appreciation of a pool of shared appreciation home loans issued on Homium.
Reverse mortgage volume dropped in February compared to the month prior, and new data compiled by Reverse Market Insight (RMI) shows that the primary culprit for the month was retail reverse mortgage originations.
The retail channel volume decrease of 15.7% effectively “masked” a gain of 3.9% posted on the wholesale side of the business, according to RMI. To get a better idea of the dynamics driving this data, RMD spoke with Jon McCue, RMI’s director of client relations, for additional perspective and a breakdown of why business moved this way.
Retail vs. wholesale drop
When asked about why retail suffered a heavier drop for the month, McCue said it could stem from a few different factors.
“I know some companies have gone back to brokering their loans because the volumes are not high enough to support their own staff to compete in the full correspondent space, so I’m sure there is an uptick in part to that,” McCue said. “Outside of that, a one-month decline like this is really too early to weigh in heavily with speculation. If this becomes a trend, then I think that would tell us more.”
Four of the top 10 lenders in the space — South River Mortgage, Goodlife Home Loans, Longbridge Financial and Liberty Reverse Mortgage — managed to post gains for the month. When asked about why the bigger lenders sustained drops in the retail and consumer-direct business channels compared to the wholesale side, McCue said part of it is data visibility.
“Given that the vast majority of brokers in the space only do zero to one loans a month, it is easier to see the significant decreases in the larger players since their volumes are more visible to the entire space,” he said.
“Because of this fact, when there are industry headwinds, we tend to see it first in the larger lenders simply because it is easier to see. However, if we go back to the November and December case number assignments, the writing was sort of on the wall that a month like this was coming.”
That’s because those were the two lowest case number assignment months in all of 2023, McCue said. South River Mortgage does not have a wholesale channel, so its growth was due entirely to retail, but for the other lenders it was a bit more channel-driven, with the exception of Longbridge, he added.
“Longbridge led the wholesale channel in February and was No. 3 in retail, so when combined it gave them a nice boost month over month,” McCue said. “Goodlife was all from their wholesale channel, and Liberty was a little bit of a combined effort as well from both its channels.”
Case numbers, product types
In terms of case numbers, the low-issuance months at the end of 2023 served as a bit of a telegraph, McCue noted.
“Since we are speaking of February endorsements, we need to go back to around the November and December case number assignments, which happened to be the lowest in all of 2023 at just over 2,600 and 2,200 respectively,” he explained.
“With that said, you shouldn’t be too surprised to see endorsements fall off in February. However, ever since the start of the year, we have seen an uptick in case numbers, which correlates to the uptick in activity LOs have been seeing and that [RMD has] reported on.”
Earlier in the year, RMD spoke to reverse mortgage managers and loan officers across the country, who did in fact report a more steady stream of inbound inquiries and product interest. Part of that was also due to an apparent increase in originator sentiment around the HECM for Purchase (H4P) product, which RMI hopes to see more of in the months ahead.
“We are firm believers that the H4P product is prime to take off,” McCue said. “When looking at H4P volumes over the years, interest rates have had very little to do with its success. In fact, the lowest levels of H4P were in the lowest rate environment during the 2020 pandemic as inventory tightened and seniors were not interested in moving given all that was happening.”
Industry perseverance
But other data suggests that seniors may be more willing to move again. He cited the 2024 Generational Trends report from by the National Association of Realtors (NAR), which indicated that the senior demographic made up the second-largest portions of buyers and sellers.
“This tells me [seniors] are moving again, so what are their options? For the right people in this high interest rate environment, an H4P may just be what they need,” McCue said. “And now that the program has gone through some recent changes, it is more closely related to its forward counterpart.”
The reverse mortgage industry, he added, is adding its own brand of perseverance to the table.
“With the rate environment we are in, it is tough, but case number assignments have been on the rise since January, the H4P product got some much needed improvements, and in speaking with LOs, it sounds like they are keeping busy,” McCue said. “Currently, all signs are pointing in the right direction, but that isn’t because of rates. It’s because of the hard work of all the professionals in this space working very hard to help their clients.”
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors’ opinions or evaluations.
As we head into peak home-buying season, signs of life have begun to spring up in the housing market.
Even so, still-high mortgage rates and home prices amid historically low housing stock continue to put homeownership out of reach for many.
Moreover, the National Association of Realtors agreed to a monumental $418 million settlement on March 15 following a verdict favoring home sellers in a class action lawsuit. Still subject to court approval, the settlement requires changes to broker commissions that will upend the buying and selling model that has been in place for years.
Housing Market Forecast for 2024
Elevated mortgage rates, out-of-reach home prices and record-low housing stock are the perennial weeds that experts say hopeful home buyers can expect to contend with this spring—and beyond.
“The housing market is likely to continue to face the dual affordability constraints of high home prices and elevated interest rates in 2024,” said Doug Duncan, senior vice president and chief economist at Fannie Mae, in an emailed statement. “Hotter-than-expected inflation data and strong payroll numbers are likely to apply more upward pressure to mortgage rates this year than we’d previously forecast.”
Despite ongoing affordability hurdles, Fannie Mae forecasts an increase in home sales transactions compared to last year. Experts also anticipate a slower rise in home prices this year compared to recent years, but price fluctuations will continue to vary regionally and depend strongly on local market supply.
U.S. home prices declined in January for the third consecutive month due to high borrowing costs, according to the latest S&P CoreLogic Case-Shiller Home Price Index. But prices year-over-year jumped 6%—the fastest annual rate since 2022.
Chief economist at First American Financial Corporation Mark Fleming predicts a “flat stretch” ahead.
“If the 2020-2021 housing market was too hot, then the 2023 market was probably too cold, but 2024 won’t yet be just right,” Fleming said in his 2024 forecast.
Will the Housing Market Finally Recover in 2024?
For a housing recovery to occur, several conditions must unfold.
“For the best possible outcome, we’d first need to see inventories of homes for sale turn considerably higher,” says Keith Gumbinger, vice president at online mortgage company HSH.com. “This additional inventory, in turn, would ease the upward pressure on home prices, leveling them off or perhaps helping them to settle back somewhat from peak or near-peak levels.”
And, of course, mortgage rates would need to cool off—which experts say is imminent despite rates edging back up toward 7%. For the week ending April 11, the 30-year fixed mortgage rate stood at 6.88%, according to Freddie Mac.
However, when mortgage rates finally go on the descent, Gumbinger says don’t hope they cool too quickly. Rapidly falling rates could create a surge of demand that wipes away any inventory gains, causing home prices to rebound.
“Better that rate reductions happen at a metered pace, incrementally improving buyer opportunities over a stretch of time, rather than all at once,” Gumbinger says.
He adds that mortgage rates returning to a more “normal” upper 4% to lower 5% range would also help the housing market, over time, return to 2014-2019 levels. Yet, Gumbinger predicts it could be a while before we return to those rates.
Nonetheless, Kuba Jewgieniew, CEO of Realty ONE Group, a real estate brokerage company, is optimistic about a recovery this year.
“[W]e’re definitely looking forward to a better housing market in 2024 as interest rates start to settle around 6% or even lower,” says Jewgieniew.
NAR Settlement Rocks the Residential Real Estate Industry
Following years of litigation, the National Association of Realtors (NAR) has agreed to pay $418 million to settle a series of antitrust lawsuits filed in 2019 on behalf of home sellers.
The plaintiffs claimed that the leading national trade association for real estate brokers and agents “conspired to require home sellers to pay the broker representing the buyer of their homes in violation of federal antitrust law.”
Though the landmark settlement is subject to court approval, most consider it a done deal.
The settlement requires NAR to enact new rules, including prohibiting offers of broker compensation on multiple listing services (MLS), the private databases that allow local real estate brokers to publish and share information about residential property listings. The rule is set to take effect in mid-July, once the settlement receives judge approval.
Moreover, sellers will no longer be required to pay buyer broker commissions and real estate agents participating in the MLS must establish written representation agreements with their buyer clients.
NAR denies any wrongdoing and maintains that its current policies benefit buyers and sellers. The organization believes it’s not liable for seller claims related to broker commissions, stating that it has never set commissions and that commissions have always been negotiable.
How Will the New Rules Impact the Buying and Selling Process?
Per the settlement’s terms, the costs associated with buying and selling a home are set to change dramatically.
“The primary things that will change are the decoupling of the seller commission and the buyer commission in the MLS,” says Rita Gibbs, a Realtor at Realty One Group Integrity in Tucson. “It’s gonna cause some chaos.”
While sellers will no longer be able to offer broker compensation in the MLS, there’s no rule prohibiting off-MLS negotiations. Because of this, Gibbs suspects buyers and sellers will continue offering broker compensation off the MLS.
The Department of Justice confirmed it will permit listing brokers to display compensation details on their websites. However, buyer agents will need to undergo the tedious task of visiting countless broker websites to find who’s offering what.
Michael Gorkowski, a Virginia-based real estate agent with Compass, is also trying to figure out how to manage the potential ruling.
“We often work with buyers for many months and sometimes years before they find exactly what they’re looking for,” Gorkowski says. “So in a case where a seller isn’t offering a co-broker commission, we will have to negotiate that the buyer pays an agreed-upon commission prior to starting their search.”
The Changes Will Impact These Home Buyers Most
“In the short term, it is absolutely going to injure buyers, especially FHA and VA buyers,” Gibbs says. “With rare exception, these buyers are not in a position to pay for their own agent.”
Gibbs says that if sellers don’t offer compensation, many buyers who can’t otherwise afford to pay a broker will choose to go unrepresented.
Gorkowski notes that veterans taking out VA loans face a unique challenge under the new rules. “[P]er the VA requirements, buyers cannot pay so it must be negotiated with the seller for now.”
As a result, NAR is calling on the U.S. Department of Veterans Affairs to revise its policies prohibiting VA buyers from paying broker commissions. Even so, there’s skepticism that the federal government will be able to implement changes in time for the July deadline.
Gibbs and Gorkowski are among the many agents especially concerned about first-time home buyers. After July, first-time and VA buyers will be required to sign a buyer-broker agreement stating that they will compensate their broker—but Gibbs says many won’t have the means to do so.
In this situation, agents would likely only show buyers homes where sellers are offering compensation.
“This is a very troubling situation,” Gorkowski says.
Housing Inventory Forecast for 2024
With many homeowners “locked in” at ultra-low interest rates or unwilling to sell due to high home prices, demand continues to outpace housing supply—and likely will for a while—even as some homeowners may finally be forced to sell due to major life events such as divorce, job changes or a growing family.
“I don’t expect to see a meaningful increase in the supply of existing homes for sale until mortgage rates are back down in the low 5% range, so probably not in 2024,” says Rick Sharga, founder and CEO of CJ Patrick Company, a market intelligence and business advisory firm.
Housing stock remains near historic lows—especially entry-level supply—which has propped up demand and sustained ultra-high home prices. Here’s what the latest home values look like around the country.
Yet, some hopeful housing stock signs have begun to sprout:
Existing inventory is showing signs of loosening as impatient buyers and sellers have begun to accept the reality of mortgage rates oscillating between 6% and 7%.
Home-builder outlook also continues to get sunnier, trending back up amid declining mortgage rates and better building conditions.
The most recent National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), which tracks builder sentiment, saw a fourth consecutive monthly rise, surpassing a crucial threshold with an increase from 48 to 51 in March. A reading of 50 or above means more builders see good conditions ahead for new construction.
At the same time, new single-family building permits ticked up 1% in February—the 13th consecutive monthly increase—according to the latest data from the U.S. Census Bureau and U.S. Department of Housing and Urban Development (HUD).
Residential Real Estate Stats: Existing, New and Pending Home Sales
Though some housing market data indicates signs of growth are in store this spring home-buying season, persistently high mortgage rates may hinder activity from fully flourishing.
Here’s what the latest home sales data has to say.
Existing-Home Sales
Existing-home sales came to life in February, shooting up 9.5% from the month before, according to the latest data from the NAR. Sales dipped 3.3% from a year ago.
Experts attribute the monthly jump to a bump in inventory.
“Additional housing supply is helping to satisfy market demand,” said Lawrence Yun, chief economist at NAR, in the report.
Existing inventory rose 5.9%—logging 1.07 million unsold homes at the end of February. However, there are still only 2.9 months of inventory at the current sales pace. Most experts consider a balanced market falling between four and six months.
Meanwhile, existing home prices continue to soar to unprecedented heights, reaching $384,500, which marks the eighth consecutive month of yearly price increases and a February median home price record.
New Home Sales
Sales of newly constructed single-family houses ticked down by a nominal 0.3% compared to January, but outpaced February 2023 sales by 5.9%, according to the latest U.S. Census Bureau and HUD data.
Amid a high percentage of homeowners still locked in to low mortgage rates, home builders have been picking up the slack.
“New construction continues to be an outsized share of the housing inventory,” said Dr. Lisa Sturtevant, chief economist at Bright MLS, in an emailed statement.
Sturtevant notes that declining new home prices are coming amid a recent trend of builders introducing smaller and more affordable homes to the market.
The median price for a new home in February was $400,500, down 7.6% from a year ago.
Source: U.S. Census Bureau and U.S. Department of Housing and Urban Development
Pending Home Sales
NAR’s Pending Homes Sales Index rose 1.6% in February from the month prior even as mortgage rates approached 7% by the end of the month. Pending transactions declined 7% year-over-year.
A pending home sale marks the point in the home sales transaction when the buyer and seller agree on price and terms. Pending home sales are considered a leading indicator of future closed sales.
The Midwest and South saw monthly transaction gains while the Northeast and West saw declines due to affordability challenges in those higher-cost regions.
“While modest sales growth might not stir excitement, it shows slow and steady progress from the lows of late last year,” said Yun, in the report.
Ongoing Affordability Challenges Could Throw Cold Water on Spring Home-Buying Hopes
Though down from its 2023 high of 7.79%, the average 30-year fixed mortgage rate in 2024 remains well over 6% amid rising home values. As a result, home buyers continue to face affordability challenges.
According to data from its first-quarter 2024 U.S. Home Affordability Report, property data provider Attom found that median-priced single-family homes remain less affordable than the historical average in over 95% of U.S. counties.
For one, the data uncovered that expenses are eating up more than 32% of the average national wage. Common lending guidelines require monthly mortgage payments, property taxes and homeowners insurance to comprise 28% or less of your gross income.
At the same time, home prices and homeownership expenses continue to outpace wage growth.
Consequently, the latest expense-to-wage ratio is hovering at one of the highest points over the past decade, according to the Attom report, despite some slight affordability improvements over the last two quarters.
“Affording a home remains a financial stretch, or a pipe dream, for so many households,” said Rob Barber, CEO at Attom.
Pro Tips for Buyers and Sellers
Here are some expert tips to increase your chances for an optimal outcome in this tight housing market.
Pro Tips for Buying in Today’s Real Estate Market
Hannah Jones, a senior economic research analyst at Realtor.com, offers this expert advice to aspiring buyers:
Know your budget. Instead of focusing on price, figure out how much you can afford as a monthly payment. Your monthly housing payment is influenced by the price of the home, your down payment, mortgage rate, loan term, home insurance and property taxes.
Be flexible about home size and location. Perhaps your budget is sufficient for a small home in your perfect neighborhood, or a larger, newer home further out. Understanding your priorities and having some flexibility can help you move quickly when a suitable home enters the market.
Keep an eye on the market where you hope to buy. Determine the area’s available inventory and price levels. Also, pay attention to how quickly homes sell. Not only will you be tuned in when something great hits the market, you can feel more confident moving forward with purchasing a well-priced home. A real estate agent can help with this.
Don’t be discouraged. Purchasing a home is one of the largest financial decisions you’ll ever make. Approaching the market confidently, armed with good information and grounded expectations will take you far. Don’t let the hustle of the market convince you to buy something that’s not in your budget, or not right for your lifestyle.
Pro Tips for Selling in Today’s Real Estate Market
Gary Ashton, founder of The Ashton Real Estate Group of RE/MAX Advantage, has this expert advice for sellers:
Research comparable home prices in your area. Sellers need to have the most up-to-date pricing intel on comparable homes selling in their market. Know the market competition and price the home competitively. In addition, understand that in some price points it’s a buyer’s market—you’ll need to be prepared to make some concessions.
Make sure your home is in top-notch shape. Homes need to be in great condition to compete and create a strong “online curb appeal.” Well-maintained homes and attractive front yards are major features that buyers look for.
Work with a local real estate agent. A real estate agent or team with a strong local marketing presence and access to major real estate portals can offer significant value and help you land a great deal.
Don’t put off issues that require attention. Prepare the home by making any repairs or improvements. Removing any objections that buyers may see helps focus the buyer on the positive attributes of the home.
Will the Housing Market Crash in 2024?
Despite some areas of the country experiencing monthly price declines, the likelihood of a housing market crash—a rapid drop in unsustainably high home prices due to waning demand—remains low for 2024.
“[T]he record low supply of houses on the market protects against a market crash,” says Tom Hutchens, executive vice president of production at Angel Oak Mortgage Solutions, a non-QM lender.
Moreover, experts point out that today’s homeowners stand on much more secure footing than those coming out of the 2008 financial crisis, with many borrowers having substantial home equity.
“In 2024, I expect we’ll see home appreciation take a step back but not plummet,” says Orphe Divounguy, senior macroeconomist at Zillow Home Loans.
This outlook aligns with what other housing market watchers expect.
“Comerica forecasts that national house prices will rise 2.9% in 2024,” said Bill Adams, chief economist at Comerica Bank, in an emailed statement.
Divounguy also notes that several factors, including Millennials entering their prime home-buying years, wage growth and financial wealth are tailwinds that will sustain housing demand in 2024.
Even so, with fewer homes selling, Dan Hnatkovskyy, co-founder and CEO of NewHomesMate, a marketplace for new construction homes, sees a price collapse within the realm of possibility, especially in markets where real estate investors scooped up numerous properties.
“If something pushes that over the edge, the consequences could be severe,” said Hnatkovskyy, in an emailed statement.
Will Foreclosures Increase in 2024?
In February, total foreclosure filings were down 1% from the previous month but up 8% from a year ago, according to Attom.
“These trends could signify evolving financial landscapes for homeowners, prompting adjustments in market strategies and lending practices,” said Barber, in a report.
Lenders began foreclosure on 22,575 properties in February, up 4% from the previous month and 11% from a year ago. Meanwhile, real estate-owned properties, or REOs, which are homes unsold at foreclosure auctions and taken over by lenders, spiked year-over-year in three states: South Carolina (up 51%), Missouri (up 50%) and Pennsylvania (up 46%).
Despite foreclosure activity trending up nationally and certain areas of the country seeing notable annual increases in REOs, experts generally don’t expect to see a wave of foreclosures in 2024.
“Foreclosure activity is still only at about 60% of pre-pandemic levels … and isn’t likely to be back to 2019 numbers until sometime in mid-to-late 2024,” says Sharga.
The biggest reasons for this, Sharga explains, are the strength of the economy—we’re still seeing low unemployment and steady wage growth—along with excellent loan quality.
Massive home price growth in homeowner equity over the past few years has also helped reduce foreclosures.
Sharga says that some 80% of today’s homeowners have more than 20% equity in their property. So, while there may be more foreclosure starts in 2024—due in part to Covid-era mortgage relief programs phasing out—foreclosure auctions and lender repossessions should remain below 2019 levels.
When Will Be the Best Time To Buy a Home in 2024?
Buying a house—in any market—is a highly personal decision. Because homes represent the largest single purchase most people will make in their lifetime, it’s crucial to be in a solid financial position before diving in.
Use a mortgage calculator to estimate your monthly housing costs based on your down. But if you’re trying to predict what might happen next year, experts say this is probably not the best home-buying strategy.
“The housing market—like so many other markets—is almost impossible to time,“ Divounguy says. “The best time for prospective buyers is when they find a home that they like, that meets their family’s current and foreseeable needs and that they can afford.”
Gumbinger agrees it’s hard to tell would-be homeowners to wait for better conditions.
“More often, it seems the case that home prices generally keep rising, so the goalposts for amassing a down payment keep moving, and there’s no guarantee that tomorrow’s conditions will be all that much better in the aggregate than today’s.”
Divounguy says “getting on the housing ladder” is worthwhile to begin building equity and net worth.
Frequently Asked Questions (FAQs)
Will declining mortgage rates cause home prices to rise?
Declining mortgage rates will likely incentivize would-be buyers anxious to own a home to jump into the market. Expect this increased demand amid today’s tight housing supply to put upward pressure on home prices.
What will happen if the housing market crashes?
Most experts do not expect a housing market crash in 2024 since many homeowners have built up significant equity in their homes. The issue is primarily an affordability crisis. High interest rates and inflated home values have made purchasing a home challenging for first-time homebuyers.
Is it smart to buy real estate before a recession?
If you’re in a financial position to buy a home you plan to live in for the long term, it won’t matter when you buy it because you will live in it through economic highs and lows. However, if you are looking to buy real estate as a short-term investment, it will come with more risk if you buy at the height before a recession.
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The Upshot
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A Huge Number of Homeowners Have Mortgage Rates Too Good to Give Up
On a scale not seen in decades, many Americans are stuck in homes they would rather leave.
949
Emily Badger and
April 15, 2024
Something deeply unusual has happened in the American housing market over the last two years, as mortgage rates have risen to around 7 percent.
Rates that high are not, by themselves, historically remarkable. The trouble is that the average American household with a mortgage is sitting on a fixed rate that’s a whopping three points lower.
Rates on new home loans now far surpass rates locked in by Americans with existing
mortgages.
2%
2000
2005
2010
2015
2020
2023
Average fixed mortgage rates
8%
Existing
mortgages
6%
3.2-
point
gap
Rates on
new loans
4%
Rates on new home loans now far surpass rates locked in by Americans with existing
mortgages.
2%
2000
2005
2010
2015
2020
2023
Source: Federal Housing Finance Agency analysis. Note: New loan figures show the predicted rate that existing mortgage holders could get on the same mortgages at new market conditions.
The gap that has jumped open between these two lines has created a nationwide lock-in effect — paralyzing people in homes they may wish to leave — on a scale not seen in decades. For homeowners not looking to move anytime soon, the low rates they secured during the pandemic will benefit them for years to come. But for many others, those rates have become a complication, disrupting both household decisions and the housing market as a whole.
new research from economists at the Federal Housing Finance Agency, this lock-in effect is responsible for about 1.3 million fewer home sales in America during the run-up in rates from the spring of 2022 through the end of 2023. That’s a startling number in a nation where around five million homes sell annually in more normal times — most of those to people who already own.
These locked-in households haven’t relocated for better jobs or higher pay, and haven’t been able to downsize or acquire more space. They also haven’t opened up homes for first-time buyers. And that’s driven up prices and gummed up the market.
Share of existing mortgages with rates below or above new market rates Percentage point difference from rates on new mortgages BELOW
-3
-2
-1
0
+1
+2
+3
ABOVE
Federal Housing Finance Agency analysis. Note: Data covers all fixed-rate mortgages in the U.S.
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A wholesale mortgage lender is an institution that funds mortgages and offers them through third parties, such as a bank, credit union or mortgage broker.
Wholesale mortgage lending requires the borrower to work with a middleman instead of the lender.
Wholesale lenders can offer cheaper rates and more relaxed eligibility rules compared to traditional lenders.
There are a bevy of mortgage lenders out there, but they come in two basic types: retail and wholesale. The difference is, while retail lenders work directly with individual borrowers, wholesale mortgage lenders don’t.
Instead, they fund mortgages and offer them through third parties, such as another financial institution, like a bank, credit union or other lender. Or, they partner with mortgage brokers, who work with individuals to find the right loan — sometimes at a discounted rate — and prepare the application.
Here’s what to know about wholesale lending and what to expect if you borrow money from a wholesale mortgage lender.
How wholesale lending works
In wholesale lending, the borrower typically doesn’t have direct contact with the firm putting up the money. Instead, the borrower interacts with a third party — another financial institution or professional. This party is the one the borrower applies through; it’s also the one communicating with the applicant throughout the loan’s underwriting process. But it’s the wholesale lender that sets the mortgage options and terms.
It’s also the wholesaler who technically owns the mortgage. And, once their loans close, wholesale lenders typically sell them in the secondary mortgage market to free up capital to fund more mortgages.
Because they don’t do consumer advertising and marketing, and don’t have to employ customer reps, wholesale mortgage lenders often offer more competitive rates and more flexible loan options and requirements than retail lenders.
Wholesale vs. retail mortgage lenders
The major differences between wholesale and retail mortgage lenders:
Middleman presence: Wholesale lenders don’t deal directly with borrowers; they operate behind the financing scenes. In contrast, retail lenders connect with borrowers directly.
Limited home loan options: Wholesaler lenders typically have fairly narrow home loan offerings. However, when working with a retail lender (such as a bank or credit union), borrowers can usually pick from multiple home loan products, which are underwritten, serviced and funded in-house by the lender.
Additional financial products: Wholesale mortgage lending companies exclusively focus on home loans. Retail lenders tend to offer other financial products as well, like lines of credit, checking accounts and business loans.
The role of mortgage brokers in wholesale lending
If you’re interested in easy comparison shopping and having someone who can walk you through the lending process, the mortgage broker-and-wholesale lender route might be a good fit for you.
Mortgage brokers typically have existing relationships with wholesale lenders. They act as the lender’s loan officer, in a sense. You’ll work with the broker to complete each step in the application process. Once your application is ready for review, the broker will coordinate with the wholesale lender’s underwriting team for approval.
The broker’s role doesn’t stop with assisting the prospective borrower with their mortgage application. They also work to find you the best deal on a mortgage. Since they can shop your information around to their wholesale lender contacts, you could secure more competitive rates and terms than you would if shopping for a home loan independently. Often, they’ll present you with several options, and help you decide among them.
Wholesale mortgage lending process
Below is an overview of what to expect if you decide to go the wholesale lender route via a mortgage broker:
Step 1: Connect with the mortgage broker to complete a loan application and gather documentation the wholesale lender needs to make a decision.
Step 2: The mortgage broker confirms your application is complete and submits it to the wholesale lender for review.
Step 3: Upon receipt, a member of the wholesale lender’s underwriting team analyzes your loan application, along with the supporting documentation, and verifies the entries to make a lending decision.
Step 4: If your application is approved, the mortgage broker provides you with a commitment letter from the wholesale lender detailing the loan terms and any applicable conditions.
Step 5: The mortgage broker coordinates with the wholesale lender to close your home loan. If there are any conditions the borrower must satisfy for the loan to finalize, the mortgage broker notifies the borrower during this step.
Step 6: Once all conditions are met, the wholesale lender issues the “clear to close” to the mortgage broker, and the broker notifies the borrower. The borrower sends their down payment and the funds for closing costs (which include the broker’s fee if applicable) to the title company shortly before closing.
Step 7: At closing, the borrower signs the loan documents to finalize their end of the transaction.
Step 8: The wholesale lender funds the home loan.
Pros and cons of wholesale mortgage lending
If you’re considering wholesale mortgage lending, keep these pros and cons in mind to guide your decision:
Pros of wholesale mortgage lending
Potentially less stringent eligibility guidelines
Potentially more competitive rates and flexible loan terms
Personalized support from a mortgage broker
Cons of wholesale mortgage lending
No direct contact with the lender
Mortgage broker fees (if applicable)
Higher likelihood of loan sell-off following closing
The top wholesale mortgage lenders in 2023
Here are the 10 U.S. lenders doing the most wholesale mortgage business as of 2023. They are ranked by dollar volume of their wholesale mortgage operations (some of them also do retail).
Lender
Wholesale volume (billions)
% of business that’s wholesale
Source: The Scotsman Guide
United Wholesale Mortgage
$12.29
100
Newrez LLC / Caliber Home Loans
$11
15
loanDepot
$8.23
12
Pennymac
$6.94
6
Paramount Residential Mortgage Group
$3.89
36
Angel Oak Mortgage Solutions
$3.22
94
CMG Home Loans
$3.19
15
Change Lending
$2.93
44
A&D Mortgage
$2.70
79
LoanStream Mortgage
$2.61
95
Is wholesale mortgage lending right for you?
Getting a loan from a wholesale mortgage lender might be a good option if your credit history is less than stellar or unique, since a mortgage broker or other third party has a relationship with the lender and could get you approved under less strict requirements. Because they don’t have to spend a lot on advertising, loan officers and overhead, wholesale lenders might offer better terms and charge fewer or smaller closing costs.
However, since you’re not directly in touch with a wholesale lender, communication could be slower, and seem more mysterious. Most mortgage brokers work on commission but some also charge you a fee. Be sure to compare this cost to those of other lenders as you weigh your options.
The average long-term mortgage rate has risen once again this week, with the average 30-year fixed loan now at 7.08 per cent, according to Bankrate’s latest survey of large lenders.
Another mortgage buyer, Freddie Mac, said the average rate on a 30-year mortgage rose to 6.88 per cent from 6.82 per cent last week. In comparison to a year ago, where the rate averaged 6.27%, this is having a genuine impact on American homeowners.
Average 30-year mortgage rates in the 10 largest metro areas ranged from 7.56% in Los Angeles to 6.85% in Chicago.
Rates are slightly higher now compared to the start of this year, keeping some borrowers waiting as the spring begins, which is typically known as the most popular time to buy a home.
The national median family income for 2023 was $96,300, according to the U.S. Department of Housing and Urban Development. The median price of an existing home sold in February 2024 was $384,500, according to the National Association of Realtors (NAR).
How will it affect your payment?
The initial impact of this change was felt in the stock market, with Wall Street sending shares sharply lower, as expectations that the Fed would be cutting rates proved to be premature.
Mortgage rates are influenced by the Fed benchmark rate, although they also reflect other factors, like bond yields and inflation. However, according to Lawrence Yun, chief economist at the NAR, rates for home loans are likely to be unchanged in the near-term due to factors like the strong job market and housing demand.
But that is no consolation for those already with mortgages. When mortgage rates rise, they can prove to be hugely damaging for families struggling to get by, as they add hundreds of dollars a month in costs for borrowers.
With this rise, based on a 20 per cent downpayment and a 7.08 per cent mortgage rate, the monthly payment of $2,063 amounts to 26 per cent of the typical family’s monthly income.