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Thursday, April 11, 2024 By: Ralph dibugnara Updated March 28, 2024 12:26 pm ET By Aly J. Yale https://www.wsj.com/buyside/personal-finance/mortgage-rates-01662579229 If you’re financing a home with a mortgage, ensuring you get the best possible rate is one of the smartest financial moves you can make. While it takes some legwork, the pay off is hard to argue with. Shaving even a fraction of a point from your rate can save you hundreds of dollars each month and tens of thousands over the life of the loan. For example, with a $400,000 mortgage, dropping from a 7% to a 6.5% rate would save you almost $50,000 in interest over a 30-year term—roughly enough to pay for a year of private college. Mortgage rates change constantly—and differ across mortgage companies . Here’s how to take advantage of those facts, compare current mortgage rates and get the best deal. Current mortgage rates: How high are average mortgage rates right now? For weeks now, average mortgage rates held steady in the high-6% range, according to Freddie Mac. As of the close of March, the average 30-year mortgage rate was 6.79%. Weekly mortgage rates WEEK ENDING AVERAGE 30-YEAR FIXED RATE AVERAGE 15-YEAR FIXED RATE March 28, 2024 6.79% 6.11% Mar. 21, 2024 6.87% 6.21% Mar. 13, 2024 6.74% 6.16% Mar. 7, 2024 6.88% 6.22% Feb. 29, 2024 6.94% 6.26% Freddie Mac “There has been a little more volatility since February, with rates moving up a bit—but they’re still below their highs from 2023,” says Rick Mount, managing partner of the Southwest region of Churchill Mortgage. Mount’s referring to last October, when rates nearly topped 8%. Still, average rates are about half a percentage point higher than they were a year ago—and borrowers have taken note. Applications for mortgages to purchase a new home are now down 16% compared to last year, according to the Mortgage Bankers Association. Refinances have dropped 9%. Where are mortgage rates headed? AVERAGE RATE DATE Current rate 6.79% March 28, 2024 This time last year 6.32% March 30, 2023 Highest point in last decade 7.79% Oct. 26, 2023 All-time high 18.53% Oct. 16, 1981 All-time low 2.65% Jan 7, 2021 Freddie Mac Mortgage rates have remained high thanks to stubborn inflation. Going into 2024, the Fed indicated lower rates may be on the horizon, but with inflation still sitting above the Federal Reserve’s 2% goal, those have yet to come to fruition. Instead, the Fed has kept interest rates elevated at its last several meetings, in an effort to bring inflation and consumer spending closer to its goal. “Inflation has continued to trend higher,’ says Ralph DiBugnara, a mortgage broker and senior vice president at Cardinal Financial, a mortgage company in Edgewater, N.J. “As long as inflation stays high or rises, the Fed will be hesitant to cut rates.” To be fair: The Fed doesn’t directly set mortgage rates, though they do tend to move in the same direction as the short-term rates it does control. As to when those rates might start to drop, it’s hard to say. Inflation notched up slightly in February, clocking in at 3.2%. “I believe the reality is we may see two to three cuts this year, all depending on inflation readings,” Mount says. “The Fed is committed to a 2% inflation rate, and I don’t expect we see meaningful cuts until that number is a reality.” According to the CME Group FedWatch Tool, which uses investing activity to predict future Fed moves, the Fed will likely hold steady on rates in May, with higher chances of rate cuts by the end of summer. MBA currently projects mortgage rates will drop to 6.3% by the end of the third quarter and 6.1% by year’s end. Fannie Mae predicts a 6.6% and 6.4% average, respectively. How are mortgage rates set? While the Fed influences mortgage rates, it is only one piece of the puzzle. Other external factors play a role, too—as do the details of your financial situation and loan choice. Here’s what you need to know about what determines your mortgage rate. External factors The overall state of the economy is a big contributor to the path of mortgage rates. When the economy is strong, rates tend to be higher. When the economy sputters, rates drop. “Interest rates often will rise or fall based on the strength of the economy, and ironically, bad news can be good news for lower interest rates,” says Bill Banfield, an executive at lender Rocket Mortgage. This is due in part to how economic conditions impact investment activity. When there are geopolitical concerns or the economy is wavering, investors tend to flock to safer investments—which include things such as Treasury bonds and mortgage-backed securities. This pushes the yields on those securities down (yields fall when bond prices rise), taking mortgage rates down with them. “When there is high demand for mortgage-backed securities, the prices of those MBS increase, which in turn can lower mortgage interest rates,” says Tanya Blanchard, founder of mortgage brokerage Madison Chase Capital Advisors. “This is because investors are willing to accept lower returns on their investments when the prices of MBS are high.” Finally, inflation factors in, too—and not just because of the Fed reaction. It also increases the costs for lenders to originate loans, which drives their prices higher as well. Personal factors Your personal finances will factor into your interest rate as well. First, there’s your credit score . Mortgage lenders use this number to gauge your risk as a borrower—or how likely you are to default on your loan. The lower your score, the higher the rate you’ll need to pay to compensate for the perceived risk. “Credit score is a very important consideration when applying for a mortgage,” Banfield says. “If someone has a proven track record of being responsible with their finances, they’ll be more likely to get a mortgage and a better rate.” The size of your down payment is important, too. A larger down payment means you have more to lose, which hopefully discourages you from defaulting. Smaller down payments, on the other hand, mean more risk for the lender and higher rates for you as a result. Loan-specific factors Last but not least, the type of mortgage loan you choose will also influence your rate. Loans backed by the government, such as Federal Housing Administration-backed FHA loans and Veterans Affairs-backed VA loans, tend to have lower rates than conventional or jumbo loans since they come with the federal government’s protection. Shorter-term loans (15 years, for example) also have lower rates than longer-term ones (30 years). As Goodwin explains, “While a shorter-term loan will come with a higher monthly payment, it could save you thousands on interest in the long run.” How, when and why to compare mortgage rates from different lenders Because every lender has different overhead costs, operating capacities and appetite for risk, mortgage rates can vary significantly from one company to the next. That’s why it’s important to consider several lenders before choosing where to get your loan. Freddie Mac recommends getting at least four quotes (it could save you an average of $1,200 a year , apparently). Just make sure you’re not only going by the rates a lender advertises on their website or on third-party sites. “Looking at advertised rates alone is not a good way to shop around,” Goodwin says. “Lenders typically display the lowest rates they offer as a headline to attract leads, but the actual rate you may be offered can vary dramatically depending on your own financial situation and the kind of loan you’re looking for.” Many advertised rates also include mortgage points —meaning you would need to pay an extra upfront fee to snag it. To get a rate that is truly a reflection of what you would pay as a borrower, you need to apply for preapproval . You’ll have to fill out an application and agree to a credit check for this. Once you’re done, you’ll get a loan estimate that will detail the total loan amount you are likely to qualify for, plus your interest rate and expected closing costs—or the fees required to originate, underwrite and close on your loan. Be sure to look at the APR, too—the annual percentage rate. This reflects the total annual cost of the loan, considering both your rate and any fees. Be warned, though: The rates you’re quoted aren’t guaranteed until you lock your rate. A rate lock guarantees your interest rate for a set period—usually only 30 to 60 days, depending on the lender. You’ll typically do this once you’ve found a home and have a contract in place. How to calculate your mortgage costs Comparing mortgage offers might seem tedious, but financially, it’s usually worthwhile. Even a small change in rate can have a big impact on your monthly payment and long-term interest costs. You can use a mortgage calculator to break down the exact costs or use your loan estimate. This should detail your monthly payment, your interest rate and your total interest paid in five years. See the difference that incremental rate changes can make on the cost of a 30-year, $400,000 home loan below: RATE MONTHLY PAYMENT INTEREST OVER 30 YEARS 5% $2,147 $373,023 5.25% $2,208 $395,173 5.50% $2,271 $417,616 5.75% $2,334 $440,344 6% $2,398 $463,352 6.25% $2,462 $486,632 6.50% $2,528 $510,177 6.75% $2,594 $533,981 7% $2,661 $558,035 Keep in mind that most mortgage loans are amortized, meaning the total costs are calculated and then paid in even payments across the loan term. With these loans, you’ll pay more interest upfront and less toward the end of the term. For example, your first payment at 6% would see $2,000 go toward interest, while your final payment would have just $11.93. “At the beginning of the loan term, the majority of the monthly payment will go toward interest,” says Colleen Bara, a lending executive with Key Bank. “As the loan is paid down, more of the monthly payment is allocated toward the pay-down of the principal balance.” This means if you sell your home quickly after taking out your loan, you likely won’t have paid down your balance much—and may not make much from the home, profit-wise. If this is a concern, making an extra payment each year you’re in the house can help. “Make one extra principal payment yearly and you can shave off approximately seven years of interest,” Blanchard says.

Thursday, April 11, 2024 By: Ralph dibugnara Updated March 28, 2024 12:26 pm ET By Aly J. Yale https://www.wsj.com/buyside/personal-finance/mortgage-rates-01662579229 If you’re financing a home with a mortgage, ensuring you get the best possible rate is one of the smartest financial moves you can make. While it takes some legwork, the pay off is hard to argue with. Shaving even a fraction of a point from your rate can save you hundreds of dollars each month and tens of thousands over the life of the loan. For example, with a $400,000 mortgage, dropping from a 7% to a 6.5% rate would save you almost $50,000 in interest over a 30-year term—roughly enough to pay for a year of private college. Mortgage rates change constantly—and differ across mortgage companies . Here’s how to take advantage of those facts, compare current mortgage rates and get the best deal. Current mortgage rates: How high are average mortgage rates right now? For weeks now, average mortgage rates held steady in the high-6% range, according to Freddie Mac. As of the close of March, the average 30-year mortgage rate was 6.79%. Weekly mortgage rates WEEK ENDING AVERAGE 30-YEAR FIXED RATE AVERAGE 15-YEAR FIXED RATE March 28, 2024 6.79% 6.11% Mar. 21, 2024 6.87% 6.21% Mar. 13, 2024 6.74% 6.16% Mar. 7, 2024 6.88% 6.22% Feb. 29, 2024 6.94% 6.26% Freddie Mac “There has been a little more volatility since February, with rates moving up a bit—but they’re still below their highs from 2023,” says Rick Mount, managing partner of the Southwest region of Churchill Mortgage. Mount’s referring to last October, when rates nearly topped 8%. Still, average rates are about half a percentage point higher than they were a year ago—and borrowers have taken note. Applications for mortgages to purchase a new home are now down 16% compared to last year, according to the Mortgage Bankers Association. Refinances have dropped 9%. Where are mortgage rates headed? AVERAGE RATE DATE Current rate 6.79% March 28, 2024 This time last year 6.32% March 30, 2023 Highest point in last decade 7.79% Oct. 26, 2023 All-time high 18.53% Oct. 16, 1981 All-time low 2.65% Jan 7, 2021 Freddie Mac Mortgage rates have remained high thanks to stubborn inflation. Going into 2024, the Fed indicated lower rates may be on the horizon, but with inflation still sitting above the Federal Reserve’s 2% goal, those have yet to come to fruition. Instead, the Fed has kept interest rates elevated at its last several meetings, in an effort to bring inflation and consumer spending closer to its goal. “Inflation has continued to trend higher,’ says Ralph DiBugnara, a mortgage broker and senior vice president at Cardinal Financial, a mortgage company in Edgewater, N.J. “As long as inflation stays high or rises, the Fed will be hesitant to cut rates.” To be fair: The Fed doesn’t directly set mortgage rates, though they do tend to move in the same direction as the short-term rates it does control. As to when those rates might start to drop, it’s hard to say. Inflation notched up slightly in February, clocking in at 3.2%. “I believe the reality is we may see two to three cuts this year, all depending on inflation readings,” Mount says. “The Fed is committed to a 2% inflation rate, and I don’t expect we see meaningful cuts until that number is a reality.” According to the CME Group FedWatch Tool, which uses investing activity to predict future Fed moves, the Fed will likely hold steady on rates in May, with higher chances of rate cuts by the end of summer. MBA currently projects mortgage rates will drop to 6.3% by the end of the third quarter and 6.1% by year’s end. Fannie Mae predicts a 6.6% and 6.4% average, respectively. How are mortgage rates set? While the Fed influences mortgage rates, it is only one piece of the puzzle. Other external factors play a role, too—as do the details of your financial situation and loan choice. Here’s what you need to know about what determines your mortgage rate. External factors The overall state of the economy is a big contributor to the path of mortgage rates. When the economy is strong, rates tend to be higher. When the economy sputters, rates drop. “Interest rates often will rise or fall based on the strength of the economy, and ironically, bad news can be good news for lower interest rates,” says Bill Banfield, an executive at lender Rocket Mortgage. This is due in part to how economic conditions impact investment activity. When there are geopolitical concerns or the economy is wavering, investors tend to flock to safer investments—which include things such as Treasury bonds and mortgage-backed securities. This pushes the yields on those securities down (yields fall when bond prices rise), taking mortgage rates down with them. “When there is high demand for mortgage-backed securities, the prices of those MBS increase, which in turn can lower mortgage interest rates,” says Tanya Blanchard, founder of mortgage brokerage Madison Chase Capital Advisors. “This is because investors are willing to accept lower returns on their investments when the prices of MBS are high.” Finally, inflation factors in, too—and not just because of the Fed reaction. It also increases the costs for lenders to originate loans, which drives their prices higher as well. Personal factors Your personal finances will factor into your interest rate as well. First, there’s your credit score . Mortgage lenders use this number to gauge your risk as a borrower—or how likely you are to default on your loan. The lower your score, the higher the rate you’ll need to pay to compensate for the perceived risk. “Credit score is a very important consideration when applying for a mortgage,” Banfield says. “If someone has a proven track record of being responsible with their finances, they’ll be more likely to get a mortgage and a better rate.” The size of your down payment is important, too. A larger down payment means you have more to lose, which hopefully discourages you from defaulting. Smaller down payments, on the other hand, mean more risk for the lender and higher rates for you as a result. Loan-specific factors Last but not least, the type of mortgage loan you choose will also influence your rate. Loans backed by the government, such as Federal Housing Administration-backed FHA loans and Veterans Affairs-backed VA loans, tend to have lower rates than conventional or jumbo loans since they come with the federal government’s protection. Shorter-term loans (15 years, for example) also have lower rates than longer-term ones (30 years). As Goodwin explains, “While a shorter-term loan will come with a higher monthly payment, it could save you thousands on interest in the long run.” How, when and why to compare mortgage rates from different lenders Because every lender has different overhead costs, operating capacities and appetite for risk, mortgage rates can vary significantly from one company to the next. That’s why it’s important to consider several lenders before choosing where to get your loan. Freddie Mac recommends getting at least four quotes (it could save you an average of $1,200 a year , apparently). Just make sure you’re not only going by the rates a lender advertises on their website or on third-party sites. “Looking at advertised rates alone is not a good way to shop around,” Goodwin says. “Lenders typically display the lowest rates they offer as a headline to attract leads, but the actual rate you may be offered can vary dramatically depending on your own financial situation and the kind of loan you’re looking for.” Many advertised rates also include mortgage points —meaning you would need to pay an extra upfront fee to snag it. To get a rate that is truly a reflection of what you would pay as a borrower, you need to apply for preapproval . You’ll have to fill out an application and agree to a credit check for this. Once you’re done, you’ll get a loan estimate that will detail the total loan amount you are likely to qualify for, plus your interest rate and expected closing costs—or the fees required to originate, underwrite and close on your loan. Be sure to look at the APR, too—the annual percentage rate. This reflects the total annual cost of the loan, considering both your rate and any fees. Be warned, though: The rates you’re quoted aren’t guaranteed until you lock your rate. A rate lock guarantees your interest rate for a set period—usually only 30 to 60 days, depending on the lender. You’ll typically do this once you’ve found a home and have a contract in place. How to calculate your mortgage costs Comparing mortgage offers might seem tedious, but financially, it’s usually worthwhile. Even a small change in rate can have a big impact on your monthly payment and long-term interest costs. You can use a mortgage calculator to break down the exact costs or use your loan estimate. This should detail your monthly payment, your interest rate and your total interest paid in five years. See the difference that incremental rate changes can make on the cost of a 30-year, $400,000 home loan below: RATE MONTHLY PAYMENT INTEREST OVER 30 YEARS 5% $2,147 $373,023 5.25% $2,208 $395,173 5.50% $2,271 $417,616 5.75% $2,334 $440,344 6% $2,398 $463,352 6.25% $2,462 $486,632 6.50% $2,528 $510,177 6.75% $2,594 $533,981 7% $2,661 $558,035 Keep in mind that most mortgage loans are amortized, meaning the total costs are calculated and then paid in even payments across the loan term. With these loans, you’ll pay more interest upfront and less toward the end of the term. For example, your first payment at 6% would see $2,000 go toward interest, while your final payment would have just $11.93. “At the beginning of the loan term, the majority of the monthly payment will go toward interest,” says Colleen Bara, a lending executive with Key Bank. “As the loan is paid down, more of the monthly payment is allocated toward the pay-down of the principal balance.” This means if you sell your home quickly after taking out your loan, you likely won’t have paid down your balance much—and may not make much from the home, profit-wise. If this is a concern, making an extra payment each year you’re in the house can help. “Make one extra principal payment yearly and you can shave off approximately seven years of interest,” Blanchard says.

Thursday, April 4, 2024 By: Ralph dibugnara By: Erik J. Martin Reviewed By: Aleksandra Kadzielawski March 26, 2024 - 9 min read https://themortgagereports.com/111388/what-will-the-2024-spring-homebuying-season-look-like With the weather warming up and flowers starting to bloom, it’s natural to get excited about the spring season upon us. But will hope spring eternal for home shoppers and sellers alike over the next few months? What’s in store for us as the national spring home buying season begins? When in doubt, consult those in the know. So we contacted several trusted housing market experts for their analyses and forecasts about the spring home buying season, including predictions on mortgage rates , home prices, and inventory as well as tips on how house hunters can get a leg up on the competition. What will the 2024 spring homebuying season look like? With the arrival of spring, many eyes turn towards the real estate market, particularly for individuals aspiring to buy a home. Here’s how industry insiders expect the spring home buying season to shake out, in general. Check your home buying options. Start here (Mar 26th, 2024) Albert Lord , founder/CEO of Lexerd Capital Management: “Housing affordability remains a significant concern, with high home prices and mortgage rates posing challenges for buyers. The ongoing shortage of housing supply, coupled with robust demand, is expected to sustain high home prices this season. And mortgage rates are expected to play a pivotal role in the spring market, too. The recent decline in mortgage rates is anticipated to incentivize buyer activity this spring, and the Federal Reserve’s indication of potential rate cuts in 2024 adds further encouragement. Political factors, including government policies and the upcoming elections, are also likely to affect the housing market. President Biden’s administration has already introduced initiatives to enhance housing affordability , which could include subsidizing down payments and promoting inclusionary zoning.” Rick Sharga , president/CEO of CJ Patrick Company: “The Fed’s actions have caused mortgage rates to soar, making affordability a problem for buyers and making it economically impossible for many homeowners to sell their homes and buy a new one with a mortgage rate twice as high as their current loan. So even though we are likely to see a slight seasonal uptick in property listings, we are not likely to see much more than a modest year-over-year increase in existing home sales. We’re locked into a cycle with limited supply, pent-up demand, high financing costs, and poor affordability. If we see the typical surge in demand that usually happens in the spring without a commensurate increase in supply, we will probably see sales numbers similar to last year’s lackluster totals, and prices will tick up a bit.” Mike Hardy , managing partner at Churchill Mortgage: “If we step back and look at this from a 30,000-foot perspective, we have a basic supply and demand issue, as there are significantly more people who need homes than inventory can support. Additionally, new builds are not projected to keep up with the incoming population. Inflation trends will be the key driver this spring, which will directly impact mortgage rates. Higher inflation – and subsequently higher mortgage rates – could cause a slowdown of buyers, with inventory creeping up slightly. On the other hand, falling inflation will likely cause mortgage rates to trend downward , bringing more buyers into the market and creating a bit of a frenzy with multiple offers in many areas where inventory levels are currently much lower than the historical average.” Dennis Shirshikov , adjunct professor of economics at City University of New York: “The spring market is likely to be driven by a mix of lingering economic recovery signals, environmental considerations, and the political climate. Economic factors such as inflation rates, employment figures, and consumer spending will play critical roles as well. Keep in mind that environmental concerns – including sustainability and energy efficiency – are increasingly influencing buyer preferences. Politically, regulatory changes and fiscal policies will affect market dynamics. Overall, I predict a season characterized by cautious optimism among buyers , with a keen eye on value and sustainability.” Will home prices fall this spring? With spring around the corner, hopeful homebuyers are curious: will prices finally ease up? Keeping an eye on market shifts is pivotal for those eyeing their dream homes. Let’s hear real estate experts’ take on whether prices will soften this season. Check your home buying options. Start here (Mar 26th, 2024) Dave Liniger , chairman of RE/MAX: “I don’t believe there will be a significant decline in home prices throughout the United States this spring. It will be dependent on specific regions, whereas there is still tremendous demand in certain areas and less demand in others.” Martin Orefice , CEO of Rent To Own Labs: “Housing prices may start creeping a bit lower this spring, but they aren’t going to drop so far that they change the fundamental dynamic. Homes, especially starter properties, will remain unaffordable, especially to first-time buyers.” Ralph DiBugnara , president of Home Qualified: “I believe we will see a trend upward in home prices. With a continued shortage of real estate for sale in most states, prices overall have nowhere to go but up because of lack of supply and high demand.” Lord: “I believe home prices will rise by 2% this spring, given the imbalances in supply and demand. The prevailing sentiment seems to be that, while prices will continue to rise, the pace of appreciation will slow down. This moderation in price growth is expected to vary across regions, with some markets experiencing price declines. The National Association of Realtors predicts a 1.4% increase in median prices, while Fannie Mae’s forecast estimates an average home price growth of 3.8% across 2024 .” Hardy: “I expect to see home prices rise over the next few months. There are simply more buyers that need and want housing than there are homes available for sale. We are seeing real-time reports of open houses with 50 to 100 people attending and multiple offers. It remains an absolute feeding frenzy in markets with low levels of inventory.” Sharga: “On a national basis, home prices are probably going to continue to increase in the 2024 spring buying season for two reasons. First, prices almost always peak during the spring and summer months, and this year isn’t likely to be any different. Second, demand also tends to peak during this period and is expected to overwhelm the limited supply of homes available for sale.” Will mortgage interest rates drop this season? As the spring home buying season approaches, prospective buyers and homeowners eagerly anticipate shifts in mortgage rates, which can significantly impact the affordability and dynamics of the real estate market. Find your lowest mortgage rate. Start here (Mar 26th, 2024) Here are insights from real estate experts on whether they predict mortgage rates to drop: Hardy: “Rates will likely trend down over the next 12 months, but expect some volatility. Mortgage rates have historically moved in tandem and track with inflation. Each time interest rates have dropped by 1%, roughly five million additional people have been able to afford a home that previously could not qualify. So if rates drop from the current territory of about 6.75% to 5.75%, I expect we will have approximately five million more people who can purchase a home this spring.” Jason Gelios , a Realtor in Southeast Michigan: “Mortgage rates should trend lower this season, with the rumor of the Federal Reserve decreasing the rate twice this year. While we won’t see mortgage rates drop to the 2% to 3% range anytime soon, we will see some relief in the spring to summer 2024 homebuying season.” Lord: “I foresee modest declines in mortgage rates, with the 30-year mortgage rate averaging 6.9% this spring. What will drive rate declines is not so much the current interest rate climate but the expectation for future declines in interest rates based on the Fed’s data-dependent analysis.” Shirhikov: “Mortgage rates are expected to fluctuate this season. Should the Fed decide to cut rates to stimulate the economy, we could see a temporary dip, making the spring buying season more attractive. However, buyers should remain vigilant, as rates are subject to rapid changes based on broader economic signals.” What will inventory look like over the next few months? The availability of homes for sale plays a crucial role in shaping market dynamics and influencing buyer decisions. Here are insights from real estate experts regarding their predictions for home inventory this spring: Check your home buying options. Start here (Mar 26th, 2024) Liniger: “Presently, there is a significant demand for residential property driven by younger generations like Millennials and Generation Z, who dominate the market and account for 50% of the current workforce. However, despite a tremendous number of buyers, insufficient inventory remains a challenge. There probably won’t be much change over the next three months unless there is interest rate assistance from the government. Younger generations who have become used to previous lower interest rates at 2.5% to 5% will also eventually come to terms with current interest rates sitting at 7% to 8%.” Hardy: “I anticipate a slight rise in inventory in the short term. As rates get noticeably lower and into the 5% range, this supply trend will change, as another wave of buyers will enter the market and we will see inventory start to drop.” Shirshikov: “Inventory levels are anticipated to slightly increase in certain areas, driven by new construction and sellers entering the market to capitalize on stable prices. However, overall supply will likely remain tight, continuing the trend of a seller’s market in many areas. This scarcity underpins the importance of strategic buying and selling decisions.” Orefice: “Inventory will remain too low to meet demand, especially in pricey urban and suburban markets, although some new construction – especially of apartments – may take the edge off.” Sharga: “Supply is likely to increase during the spring, coming off near-record lows from a year ago. This increase might be a little misleading, as it’s only partly due to a bump in new listings and also partly because it’s taking a bit longer to sell properties once they are listed. Even with this seasonal increase, we may still have somewhere between 30% and 40% fewer homes available for sale than we did before the pandemic. On the other hand, we should continue to see an increase in the number of new homes for sale, as January building permits increased by 8.6% from January 2023, and single-family housing starts were up as well.” Tactics buyers can take for better success this spring As we gear up for the spring home buying season, it’s vital for aspiring homeowners to adopt smart strategies to boost their chances of finding their dream home. Here’s some friendly advice from real estate experts sharing tactics to help you navigate the market and enhance your prospects this spring: Time to make a move? Let us find the right mortgage for you (Mar 26th, 2024) Shishikov: “Shoppers can adapt several unique strategies to enhance their chances of securing a desired home. Explore off-market properties, leverage technology for virtual tours and faster decision-making, and consider alternative financing options. Engaging with a real estate professional who has a deep understanding of specific local markets can also provide a competitive edge. Above all, remain adaptable, informed, and ready to act decisively.” Hardy: “I suggest 10 ways that can help buyers get an offer accepted this spring. First, get fully approved for a mortgage before you make an offer. Second, work with a reputable real estate agent. Third, make an offer above the asking price. Fourth, be flexible with the closing date. Fifth, limit or waive any contingencies in your offer. Sixth, use an escalation clause in your offer. Seventh, offer to cover certain seller expenses. Eight, increase your earnest money deposit. Ninth, offer a $10,000 performance guarantee. And tenth, have your lender or agent send a personal video or letter from you to the seller to stand out from other buyers.” Orefice: “If there’s a home you are really after, you need to be prepared to make an offer over the asking price or, better yet, a cash offer.” DiBugnara: “Homes that need TLC are going to be among the only value buys right now. If you can find a home that has manageable repairs, it’s best to go that route. There are more renovation loans available today that can help with this process.” The bottom line The experts agree: A variety of economic, political, environmental, and unpredictable factors will drive the 2024 spring homebuying season. Of course, many of these elements are out of your control. Still, you can put yourself in a better position to find, afford, and close on a desirable home for sale this spring by doing your homework, learning about market conditions, making preparations as early as possible, and partnering with a seasoned real estate professional.

Thursday, Mar 28, 2024 By: Ralph dibugnara By: Paul Centopani February 29, 2024 Mortgage rate forecast for next week (March 4-8) Mortgage rates reached a two-month high, growing for the fourth straight week. The average 30-year fixed rate mortgage (FRM) increased from 6.9% on Feb. 22 to 6.94% on Feb. 29, according to Freddie Mac. “The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for home buying,” said Sam Khater, Freddie Mac’s chief economist. “While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential homebuyers on the sidelines.” Will mortgage rates go down in March? Mortgage rates fluctuated significantly in 2023, with the average 30-year fixed rate going as low as 6.09% on Feb. 2 and as high as 7.79% on Oct. 26, according to Freddie Mac. Find your lowest mortgage rate. Start here (Feb 29th, 2024)    The range can be largely attributed to the Federal Reserve’s ongoing fight against inflation, juxtaposed with uncertainty in the banking sector sparked by Silicon Valley Bank’s collapse. However, with duress permeating the financial market and the fallout from U.S. debt ceiling talks, the Fed may continue making hikes to bring interest rates down. With the economy possibly heading into a recession, we may have already seen the peak of this rate cycle. Of course, interest rates are notoriously volatile and could tick back up on any given week. Experts from CoreLogic, Home Qualified, Realtor.com and others weigh in on whether 30-year mortgage rates will climb, fall, or level off in March. Expert mortgage rate predictions for March   Craig Berry , branch manager at Acopia Home Loans Prediction: Rates will moderate “In their Jan. 31 meeting, the Fed opted to leave rates alone. According to the Federal Reserve, inflation is coming down faster than expected due to “a robust economy”. Even so, the Fed indicated they’ll need to see additional indicators that inflation has stabilized prior to making any rate cuts. This news didn’t help mortgage rates. Other than slight fluctuations, rates will remain relatively flat through the month of March.”   Molly Boesel , principal economist at CoreLogic Prediction: Rates will moderate “The Federal Reserve has taken a pause on interest rates as they monitor inflation, and those looking for decreases in rates will need to be patient. When inflation approaches the Fed target, rates should start to decrease. Until then, look for the 30-year mortgage rate to be in the high-6% range in March.”   Ralph DiBugnara , president at Home Qualified Prediction: Rates will rise “So far, the first quarter of 2024 has been very similar to the first quarter of 2023. Inflation has been up in some categories and made rates move more upward than downward. Rates came down at the end of 2023 but the most recent Fed meeting should sign that there won’t be any rate cuts until summer 2024. I believe that lack of commitment to cut or raise by the Fed will keep the market guessing and we will see averages creep up some. The 30-year fixed rate will average 7.25% in March while the 15-year fixed will average 6.75%.”   Selma Hepp , chief economist at CoreLogic Prediction: Rates will moderate “The US economy continues to show signs of strength, so therefore, rates are likely to remain stable through the spring home buying season, with cuts not expected until the beginning of summer. However, in recent industry surveys, home buyers are beginning to feel optimistic about where rates are heading and more and more home buyers are anticipating rates to decline through the year.”   Hannah Jones , senior economic research analyst at Realtor.com Prediction: Rates will moderate “Mortgage rates are likely to remain steady through March, dependent on incoming economic data. At the February FOMC meeting, Chair Powell emphasized that it is unlikely that we will see a rate cut in March as incoming economic data remains fairly strong. Later the same week, January employment data came in well above expectation with the economy adding 353,000 net new jobs in the month. The still-strong employment data demonstrated that slowing the economy may not be a straight path, and prolonged contractionary policy may be necessary. Mortgage rates are likely to remain in the mid to high 6% for the time being until slowing inflation shifts investor expectations and the Fed starts to cut interest rates.”   Jess Kennedy , COO at Beeline Prediction: Rates will moderate “We predict that rates will hold relatively steady in March. The Fed has signaled pretty strongly that they are in a holding pattern right now. We may see slight fluctuations but generally, we don’t expect much movement. The 10-year bond and 30-year mortgage rate spread continues to be pretty large and we don’t anticipate that to change any time soon since the Federal Reserve is no longer buying MBS, so the demand for MBS is lower.”   Odeta Kushi , deputy chief economist at First American Prediction: Rates will moderate “The average 30-year fixed mortgage rate has fallen in recent months, but ticked up again recently due to strong economic and labor market data. Initial optimism for Federal Reserve rate cuts was tempered after recent data, prompting the increase in mortgage rates. Traders have now ruled out a March rate cut , yet May could still see a reduction. This suggests potential mortgage rate volatility ahead, dependent on future economic data. Should this economic data exceed expectations, rates may rise further. Nonetheless, ongoing deceleration in inflation fuels cautious optimism for a general decline in mortgage rates in 2024, especially in the latter half of the year.”   Rick Sharga , CEO at CJ Patrick Company Prediction: Rates will moderate “The consensus is that the Federal Reserve will hold steady at its March meeting, neither raising nor cutting the Fed Funds Rate. Mortgage rates on 30-year fixed rate loans in March will likely do the same, neither rising or declining very much, staying in a fairly narrow band between 6.5-7.0%, fluctuating with reports on various economic metrics. The sudden dip in rates in the month of January appears to have been an overreaction by the market to language from the Fed that was interpreted as a sign of rate cuts as early as the first quarter. With that increasingly unlikely to happen, we’ve seen mortgage rates inch back up, and are likely to see them zig zag in a gradually downward direction for the rest of the year, but not drop meaningfully until the first rate cut by the Fed actually happens.”   Charles Williams , CEO at Percy Prediction: Rates will moderate “In a recent interview on 60 Minutes, Fed Chair Jerome Powell gave a strong indication that they won’t be cutting rates before the economy hits the target rates of 2%. With jobs numbers still very strong, it’s not likely we’ll see a rate cut until March, perhaps even May. And even then, it will be a slow and gradual pullback, so we’ll be lucky to dip below 6% mortgage rates by the end of the year.”  

Debunking Real Estate Myths: The Real Real Estate Truths In today's special segment, "The Real Real Estate Truths," Ralph and Keyla , will unravel some of the trending speculations circulating on social media over the past few months and provide you with the real facts about the real estate market.

Demystifying Real Estate Investment: The Accredited Investor, Cash Flow Realities, and Mortgage Insights In this episode we will delve into the intricacies of real estate investment, debunking myths, and providing valuable insights for both seasoned investors and those looking to enter the market.

The Real Real Estate Truths  Welcome to Home Qualified News, where we bring you the latest insights into the real estate market. In today's special segment, "The Real Real Estate Truth," Ralph DiBugnara and Keyla Rosario delve into recent social media trends to separate fact from fiction.

Friday, Mar 1, 2024 By: Ralph dibugnara By Kristine Hansen Feb 28, 2024 When you apply for a mortgage or refinance an existing mortgage, you want to secure the lowest interest rate possible. Any opportunity a borrower can exploit to shave dollars off the cost is a big win. This explains the allure of no-fee mortgages. These home loans and their promise of doing away with pesky fees always sound appealing—a lack of lender fees or closing costs is sweet music to a borrower’s ears. However, they come with their own set of pros and cons. No-fee mortgages have experienced a renaissance given the current economic climate, according to Ralph DiBugnara, president of Home Qualified . “No-fee programs are popular among those looking to refinance … [and] first-time home buyers [have] also increased as far as interest” goes. Be prepared for a higher interest rate But nothing is truly free, and this maxim applies to no-fee mortgages as well. They almost always carry a higher interest rate. “Over time, paying more interest will be significantly more expensive than paying fees upfront,” says DiBugnara. “If no-cost is the offer, the first question that should be asked is, ‘What is my rate if I pay the fees?’” Randall Yates, CEO of The Lenders Network , breaks down the math. “Closing costs are typically 2% to 5% of the loan amount,” he explains. “On a $200,000 loan, you can expect to pay approximately $7,500 in lender fees. Let’s say the interest rate is 4%, and a no-fee mortgage has a rate of 4.5%. [By securing a regular loan], you will save over $13,000 over the course of the loan.” So while you’ll have saved $7,500 in the short term, over the long term you’ll wind up paying more due to a higher interest rate. Weigh it out with your financial situation. Consider the life of the loan And before you start calculating the money that you think you might save with a no-fee mortgage, consider your long-term financial strategy. “No-fee mortgage options should only be used when a short-term loan is absolutely necessary,” says Jack Choros of CPI Inflation Calculator . A no-fee mortgage may be a smart tactic if you don’t plan to stay in one place for a long time or plan to refinance quickly. “If I am looking to move in a year or two, or think rates might be lower and I might refinance again, then I want to minimize my costs,” says Matt Hackett, operations manager at EquityNow . But “if I think I am going to be in the loan for 10 years, then I want to pay more upfront for a lower rate.” What additional fees should you be prepared to pay? As with any large purchase, whether it’s a car or computer, there’s no flat “this is it” price. Hidden costs always lurk in the fine print. “Most of the time, the cost for credit reports , recording fees, and flood-service fee are not included in a no-fee promise, but they are minimal,” says DiBugnara. “Also, the appraisal will always be paid by the consumer. They are considered a third-party vendor, and they have to be paid separately.” “All other costs such as property taxes, home appraisal, homeowners insurance, and private mortgage insurance will all still be paid by the borrower,” adds Yates. It’s important to ask what additional fees are required, as it varies from lender to lender, and state to state. The last thing you want is a huge surprise. “Deposits that are required to set up your escrow account, such as flood insurance, homeowners insurance, and property taxes, are normally paid at closing,” says Jerry Elinger, mortgage production manager at Silverton Mortgage in Atlanta. “Most fees, however, will be able to be covered by rolling them into the cost of the loan or paying a higher interest rate.” When does a no-fee mortgage make sense? For borrowers who want to save cash right now, but don’t mind paying more over a long time frame, a no-fee mortgage could be the right fit. “If your plan is long-term, it will almost always make more sense to pay the closing costs and take a lower rate,” says DiBugnara. “If your plan is short-term, then no closing costs and paying more interest over a short period of time will be more cost-effective.”

Thrusday, Feb 22, 2024 By: Ralph dibugnara  By: Erik J. Martin Updated By: Aleksandra Kadzielawsk February 19, 2024 The real estate domain witnessed a year filled with noteworthy changes and significant developments. High home prices and elevated mortgage rates have posed challenges for numerous potential buyers, leaving them wondering, “Will home prices drop in 2024?” As the holidays and colder weather approach, now is an opportune time to reflect on the state of the housing market and look ahead to hopefully more favorable conditions for buyers next year. That begs several questions: Is it a good time to buy a house in the coming months? Will interest rates go down? Will the housing supply improve? For answers, we reached out to several real estate and mortgage industry pros, requesting their housing market predictions. National housing market trends and stats Over the past year, the real estate market has navigated through a challenging landscape. With fluctuating home prices, elevated mortgage rates, and a range of economic factors, prospective buyers, sellers, and investors have had to adapt to a dynamic environment. Here’s what we know about the national real estate market, based on the latest data from the National Association of Realtors , Redfin , Freddie Mac , and The Mortgage Reports : · $382,600 – median existing-home sales price (up 4.4% year-over-year) · $395,850 – median asking price of existing homes for sale (up 6.3% year-over-year) · 3.78 million – seasonally adjusted annual rate of existing home sales (down 6.2% year-over-year) · 1 million (3.2 months’ supply) – inventory of unsold existing homes (up 2.9% year-over-year) · 29 days – average number of days existing homes remained on the market in December (up from 26 days a year ago) · 22.5% – share of homes selling above list price (up from 20% a year ago) · 29% – percentage of home sales coming from first-time buyers (down from 31% in November) · 6.77% – average conventional 30-year fixed mortgage rate at the time of this writing · All-cash sales accounted for 29% of transactions in December (up 28% year-over-year) But raw numbers don’t tell the whole story. For a more in-depth analysis of how we got here, perspectives on where the national housing market stands, and predictions on where interest rates, prices, inventory, and other key indicators are headed, we reached out to a variety of industry experts. Their insights and prognostications are shared below. Current housing market overview For a bird’s eye view of the real estate climate, we first asked the pros to sum up the current state of the U.S. housing market. Check your home buying options. Start here (Feb 22nd, 2024) Rick Sharga , president/CEO of CJ Patrick Company: “I’d characterize the housing market today as boring and likely to stay pretty unexciting for the foreseeable future. Existing home sales are on pace to be at their lowest total since 2009, during the Great Recession. Prices have rebounded over the past few months, and are increasing on a year-over-year basis, but very modestly (1-2%). Inventory is inching up slightly from nearly historic lows, but still down between 40-50% from the same time in 2019, when we last had a relatively normal number of homes for sale. And mortgage rates continue to rise, discouraging homeowners with lower-rate mortgages from listing their homes for sale and making a home purchase unaffordable for more buyers.” Shri Ganeshram , CEO of Awning.com: “The national real estate market presents a mixed bag of scenarios. On one hand, home prices have seen a steady climb, reflecting both the increased demand and the undeniable value people place on homeownership. Mortgage rates, while still low historically, have risen in recent months, causing some hesitations among potential home buyers. Inventory levels have been somewhat tight, especially in sought-after areas, driving up competition. Sales volumes have been robust, but with the occasional plateau, indicative of market saturation in specific areas. Home buyer interest remains high, but I’ve noticed a slight trend toward more informed and cautious buying. Remember when everyone was in a rush to get their slice of suburbia in the early 2020s? There’s more of a wait-and-watch sentiment now.” Joseph Melara , owner of Residential Brokers: “The national real estate market is experiencing several noteworthy trends. Firstly, we’ve observed a slight decline in home prices on a national level. This is in line with seasonal patterns and is not indicative of a long-term trend. Additionally, mortgage rates have been rising as a measure to stabilize inflation, which is impacting buyer affordability. Inventory levels have continued to decrease, largely because many current homeowners are holding onto their properties due to lower interest rates, resulting in reduced housing mobility. Sales volumes have declined proportionally in both the detached and attached markets, aligning with the seasonal dip in prices. However, despite these fluctuations, it’s important to note that the market remains relatively stable.” Ralph DiBugnara , president of Home Qualified: “The current real estate market is one we have never seen before, with a combination of higher interest rates, high inflation, and lack of homes for sale to meet the demand of potential buyers. But buyers, even those willing to pay high prices, are less likely to follow through on purchasing a home if it is in disrepair. That’s the difference from when payments, rates, and inflation were lower. At the increased cost across the board, buyers want a better finished product.” Nick Ron , owner/founder/CEO of House Buyers of America: “Market activity is cooling due to eye-popping home prices and interest rates. But even though the national average 30-year mortgage rate has jumped to a nearly 23-year high, buyer interest remains relatively high and the housing market is still competitive for prospective buyers.” Will home prices drop in 2024? The outlook for home prices in 2024 varies among experts. While some anticipate a potential drop of 5-10% due to factors like softening demand, affordability issues, and economic uncertainty, others predict rising prices, driven by continued high demand and low supply. Factors such as local market conditions, employment trends, and regional dynamics will play a significant role in determining the direction of home prices. Check your home buying options. Start here (Feb 22nd, 2024) Andrew Lokenauth , owner of BeFluentInFinance: “Home prices will likely drop 5-10% nationally in 2024 as demand softens further. Affordability issues, economic uncertainty, and moderating investor activity will weigh on prices. Of course, the exact amount prices will reduce will depend on local market conditions and employment trends.” Jeremy Schachter , branch manager with Fairway Independent Mortgage: “Home prices will rise in 2024. With the demand still being high and supply low, this will drive up home values, especially if rates come down, which will increase demand even more.” Glenn Phillips , CEO of Lake Homes Realty: “Housing prices nationally will level off on an average basis, with some markets slightly rising, some dropping, all based on local demand and that local demand’s local economic conditions.” Ron: “I expect house prices to rise around 3% to 4%. But at some point in 2024, I see a slowdown in price growth. The slowdown will be due to a combination of factors such as rising interest rates, an increase in the supply of homes, a decrease in demand, and affordability challenges for buyers. That said, I’m not anticipating a drop in prices nationwide. Rising construction costs and a slowing economy as a result of prolonged high interest rates will also impact the housing market in 2024. Ganeshram: “Given the current trajectory and economic indicators, I anticipate a moderate rise in housing prices nationally. The reason is consistent demand, especially in suburban and exurban regions. The urban exodus, sparked by remote work trends, hasn’t entirely plateaued. Add to that the narrative of some of my peers in the real estate industry: Many of them anticipate new housing developments in 2024, which could initially moderate prices. But expect prices overall to rise as supply tries to catch up with demand.” Sharga: “Home prices will probably rise slightly in 2024, perhaps by 2-3% as demand continues to outpace supply. However, this will not be universally true; some formerly high-flying markets like the Bay Area in California , Austin, and Phoenix could see prices continue to fall, while cities in the Southeastern states may see prices rise more quickly.” Melara: “I anticipate that national housing prices will continue to experience a mild drop in 2024. This decline is expected to be a result of seasonal fluctuations, similar to what we’ve seen historically.” Will mortgage rates come down? The outlook for mortgage rates in 2024 continues to be a subject of debate among experts. While some predict a slight decline in mortgage rates , others expect them to remain relatively high, influenced by economic factors, inflation, and Federal Reserve policy. This uncertainty leaves both buyers and sellers cautiously monitoring the mortgage rate landscape throughout the year. Find your lowest mortgage rate. Start here (Feb 22nd, 2024) DiBugnara: “Mortgage rates, on average, will be down in 2024 compared to 2023. But I do not believe they will drop as low as previously predicted by forecasters. An average interest rate in the mid 6% range for a 30-year fixed-rate loan is where I believe we will land.” Ron: “Sometime in the first half of next year we will see slightly lower, but still elevated, mortgage rates. As the economy decelerates, rates should go down. At some point in 2024, the Fed will start lowering rates as they see inflation decline and unemployment increase. Rates will still be high enough that home buyers continue to be challenged by affordability, and sellers will still be reluctant to give up their low existing mortgage rates.” Sharga: “Mortgage rates are likely to decline, slowly but steadily, over the year. This decline should begin once the Federal Reserve confirms that it’s done raising the Fed Funds rate for this cycle. But borrowers shouldn’t expect to see mortgage loans with 4% interest rates; it’s more likely that rates will gradually work their way down from 7%, and possibly end next year just below 6%.” Lokenauth: “Rates could fluctuate in 2024 based on inflation and Fed policy, but I expect rates to average in the 5-7% range. A strong labor market and slowing inflation could lead to rate cuts in the second half of 2024, but higher rates of at least 6% seem likely to persist throughout 2024.” Will housing inventory increase? While some experts anticipate a modest home inventory increase due to factors like rising interest rates and market dynamics, others argue that new construction may lag, maintaining tight inventory levels. However, one consensus remains: the housing market’s supply-demand balance continues to be a focal point for homeowners and prospective buyers alike. Check your home buying options. Start here (Feb 22nd, 2024) Here’s what some mortgage pros had to say: Phillips: “Supply will rise slightly in 2024. The reasons? Those who have been postponing selling—especially because they don’t want to give up their current low mortgage rates—may finally need to move, plus natural market churn will occur. However, no drastic change will flood the market with inventory, and buyer demand will remain strong in 2024.” Lokenauth: “Supply will gradually rise in 2024 as profit margins drop and sellers are less rushed. But new construction is lagging, keeping inventory tight for the long term. I expect to see 5-10% more listings nationally in 2024.” Sharga: “New home inventory is likely to increase a little bit next year as home builders ramp up activity to meet market demand; but the inventory of existing homes for sale will probably be flat as homeowners remain locked in by low interest rates on their current mortgages. Almost 70% of mortgage loans today have an interest rate of 4% or lower. We’re unlikely to see many of those homeowners list their properties for sale until rates drop significantly, probably to 5.5% or lower.” Ron: “I see some increases in housing inventory in 2024 due to rising interest rates, affordability challenges for buyers, and a decrease in demand. But in general, the national housing shortage will continue through the end of the 2020s. Due to the estimated pent-up demand for housing, it will take time for the nation’s builders to find suitable land, skilled labor, and materials to create a much-needed supply. Innovation in regulatory technology can also help increase the supply of housing and make it easier to build new homes faster.” Melara: “Housing inventory is anticipated to continue its decline into 2024. The primary factor contributing to this trend is the reluctance of existing homeowners to sell. This reluctance to move is reducing the overall supply of homes.”