Freddie Mac Deputy Chief Economist Len Kiefer explains why interest rates are high and if we can expect a 3% rate soon. REALTOR® Linda Rheinberger shares what buyers and sellers can expect in the market. Keith Gumbinger gives tips on getting the best mortgage rate. Melissa Dittmann Tracy discusses home design trends for summer and fall, including window film for energy efficiency.
Buyers should consider factors like credit score, income, and savings to navigate high mortgage rates and explore alternative mortgage options for lower initial rates.
Buyers should adopt passive cooling strategies like closing drapes, using ceiling fans counterclockwise, and exploring options like window film to keep their homes cool and avoid higher energy costs.
Deep dives
Higher Mortgage Interest Rates: Impact on Buyers
Mortgage interest rates have been rising, making it difficult for buyers to afford homes. Some buyers are being shut out of the market, while others are forced to accept higher monthly payments or settle for less expensive houses. Sellers are hesitant to move because they have low mortgage rates. However, home prices are still rising in some cities, creating a geographic disparity. Despite rising mortgage rates, mortgage demand has risen slightly, but it is still lower compared to a year ago. The National Association of Realtors president, Kenny Parcel, has resigned amidst allegations of sexual harassment. Mortgage interest rates are expected to remain high due to inflation, and while a return to 3% rates is unlikely, rates may ease slightly in the future. Overall, the housing market is facing affordability challenges, with slower home sales and low inventory levels.
How to Navigate High Mortgage Interest Rates
To navigate high mortgage interest rates, buyers should consider factors such as credit score, income, and savings. A credit score above 780 will qualify for the best interest rates, while a minimum FICO score of 620 is required for conventional financing. Programs for first-time homebuyers can help ease the qualification process. Lenders generally require a few months' worth of mortgage payments in reserves, in addition to the down payment and closing costs. Buyers can explore alternative mortgage options, such as adjustable-rate mortgages (ARMs) that offer lower initial rates. It is also possible to negotiate a re-lock at a lower interest rate or pay discount points to lower the interest rate. Shopping around and talking to multiple lenders can help buyers find the best rates and terms.
As mortgage interest rates rise, buyers should adopt passive cooling strategies to keep their homes comfortable without relying heavily on air conditioning. Closing drapes or blinds, keeping interior doors open, and using ceiling fans counterclockwise can help prevent excessive heat. Incorporating house plants that absorb solar energy can provide a subtle cooling effect. Rather than cranking up the air conditioner, buyers should passively cool their homes to avoid higher energy costs. Buyers should also consider the long-term implications of rising mortgage interest rates and take steps to protect their homes by exploring options like window film that can block out sunlight and reduce indoor temperatures.
Navigating the Real Estate Market Amidst Rising Mortgage Interest Rates
Navigating the real estate market during times of rising mortgage interest rates can be challenging. Buyers should be prepared to put their best foot forward by improving their credit scores, saving for a down payment, and ensuring they have enough income to comfortably afford a mortgage. First-time homebuyer programs can provide assistance, and buyers should consider negotiating with lenders to secure the best rates. Exploring alternative mortgage options, such as adjustable-rate mortgages (ARMs), and understanding the benefits of discount points can help buyers find more affordable monthly payments. Shopping around and consulting with multiple lenders is crucial to finding the best mortgage rates and terms for individual needs.
How do you navigate the real estate market amid the highest mortgage rates in two decades? Freddie Mac Deputy Chief Economist Len Kiefer explains why interest rates are so high, where they may be going, and if we can expect a 3% rate any time soon. REALTOR® Linda Rheinberger from Las Vegas, Nevada shares what home buyers and sellers can expect in the current market and what they need to do to close a sale. Keith Gumbinger from HSH.com gives tips on how to get the best interest rate for your mortgage. Also, Melissa Dittmann Tracey shares how people can keep their homes cool in the heat and if window film is hot or not.
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