September Mortgage Market Review 2022

September mortgage market review 2022

Mortgage rates remain volatile at the end of the third quarter. With 30-year fixed rates falling to 4.99% on Aug. 4 and rising to 6.02% on Sept. 15, homebuyers may wonder when they should make an offer. Interest rates rose 2.48% in the first six months of 2022, varying wildly from one week to the next as the Fed fought to control inflation.

Following the Federal Reserve’s rate hike in June, mortgage rates rose week over week in the highest jump since 1987. The daily Federal Reserve rate continues to fluctuate. Coupled with the pandemic’s economic decline and rumors of more rate hikes, you may see upward transition rates throughout the fourth quarter. Additionally, Harvard professors say that more rate hikes are needed to bring inflation under control.

Is a Recession Inevitable?

Industry experts seem split on whether mortgage rates will continue to climb at the end of September and into October. A look at the week-over-week swings paints an uncertain picture. On August 4, rates jumped 23 base points, falling nine points and then soaring 42 points in the following two weeks.

Economists are looking for the Fed to get on the same page as the market. Once inflation drops below 5%, volatility is likely to stabilize. The market is experiencing shock waves following a series of rate hikes that have dramatically challenged the mortgage industry.

Meanwhile, dramatic fluctuations are likely to continue. On the upside, with investors holding onto bonds, Demand for bonds has increased, which historically results in lower home loan rates.

Next Steps To Consider

Prospective homeowners and borrowers may wonder what to do. The same is true for those looking to refinance their homes. It’s still an excellent time to take out a mortgage loan since historical trends indicate your home will continue to appreciate over time.

So, what should home seekers do? Proceed with caution. Your Potempa Loan Officer can help you understand current trends and the pros and cons of borrowing during a particular week. In some cases, where time is of the essence, you may have to take out a mortgage loan to refinance at a better rate down the road.

A wait-and-see approach may also make sense but doesn’t get you closer to moving into a home. If you apply during a week with lower mortgage rates, lock in the rates to protect yourself against sudden surges. With demand continuing to outweigh homes available in most markets, you may not have the choice of waiting for the perfect rate.

Consider Short-Term Mortgages

Fifteen-year mortgage rates typically fall well below 30-year rates. So, it could be an excellent time to consider short-term mortgages. In times of fluctuating rates, it’s essential to keep your mind open to refinancing shortly. When rates decrease, you can always negotiate a 30-year mortgage at a lower rate. This will keep your monthly payment affordable while you wait out the fluctuating mortgage trend.

Contact Potempa online or stop by your local branch to discuss current rates and apply for a pre-approval letter.

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