Now’s the time to contact clients who have been considering buying a home and give them a little nudge.  

For the third straight week, home mortgage rates increased for all loan types. The rates have now reached their highest point since March 2020. 

Rates for 30-year mortgages had plunged to a record low a little more than a year ago. Affordable loans have sparked a housing rally that’s still running hot even as home prices continue to soar. 

More rate hikes are on the way 

Unfortunately for potential homebuyers – your prospective clients – rates may continue to rise. Most signs point to borrowing costs increasing further as the nation’s job market improves and the Federal Reserve ramps up efforts to control inflation.  

In addition, the Federal Reserve is expected to end its mortgage stimulus program by March or April 2022. That move could fuel significantly higher mortgage rates late in the first quarter or early second quarter this year. 

Fannie Mae offers the lowest prediction for upcoming rate increases, putting 30-year fixed interest rates at 3.10 percent by the end of March. Wells Fargo and Freddie Mac are at the other end, predicting 30-year rates as high as 3.35 percent or 3.40 percent in early 2022. 

Impact on purchase demand 

Have the latest rate increases already started to deter homebuyers from entering the market? Not yet. 

According to a Freddie Mac chief economist, the recent rise in mortgage rates has not affected purchase demand so far. But given the swift pace of home price growth, the rate increases could dampen demand soon.  

That means now may be the time for your clients to buy.  

At current rates, homebuyers purchasing a median-priced home, currently about $350,000, with 20 percent down, would now see a monthly payment more than $125 higher than they would have just a month ago. The monthly increase would be even more significant for those using low-down payment loans. 

Contact our team for more information about our loan programs and how we can help your clients secure financing for their new homes, contact our team.  

U.S. weekly averages as of Jan. 20, 2022 

  • 30-year: 3.56% 
  • 15-year fixed: 2.79% 
  • 15-year adjustable: 2.60%  

Source: Freddie Mac 

Sources 

DianaOlick. (2022, January 10). Mortgage rates just jumped again. here’s what that means if you’re buying a Home. CNBC. Retrieved January 21, 2022, from https://www.cnbc.com/2022/01/10/mortgage-rates-just-jumped-again-what-that-means-for-homebuyers.html

Mortgage rates. Freddie Mac. (2022, January 6). Retrieved January 21, 2022, from http://www.freddiemac.com/pmms/