I wanted to share with you what I think is happening in the mortgage world, and what I think is on the horizon for the 2nd, 3rd, and 4th quarter of 2023.
According to the NY TIMES, it looks like the Feds are set to raise rates yet again.
The Feds have been raising rates in .25% increments over the last 12 – 24+ months, but the Federal Government is not satisfied with the pace at which rising interest rates are curbing inflation.
The Federal Government is surprised at how robust the buyers’ demand seems to be, even with interest rates increasing.
The goal is to get the inflation rate below 2%.
The annual inflation rate of the United States is currently 6.4% for the last 12 months ending on January 2023 after rising to 6.5% previously, according to the US Labor Department data published on February 14, 2023.
The next inflation update is scheduled for release on March 14 at 8:30am E.T.
The Federal Reserve is pushing to raise rates by .5% to try to meet the goal of a less than 2% inflation rate, which will take some time to achieve.
Additionally, mortgage products designed to alleviate higher interest rates are not in demand on Wall Street.
Investors investing in FANNIE MAE/FREDDIE MAC products currently do not have an appetite for adjustable-rate mortgages.
When the economy is volatile, and Wall Street is not seeing gains, and inflation is at 6.4% and rising, mortgage investors do not like to take risk, and the lowest risk mortgage product is the 30-year fixed rate.
The way that Fannie Mae and Freddie Mac push the 30-year fixed rate mortgage is to make pricing on adjustable-rate mortgages less attractive than the 30-year fixed rate mortgage.
It is interesting to note that according to the CNBC in an article published 4 hours ago, the author “Diana Olick” states that mortgage applications increased by 7.4% for week according to the Mortgage Bankers Association.
I want to remind you that while 30-year fixed rate mortgages are averaging 6.7% with an average discount point of .8% as of today, according to CNBC’s article “MORTGAGE DEMAND RECOVERS SLIGHTLY, DEPSITE RISIING INTEREST RATES”, there are still viable loans to help our borrowers get into homes.
As a TOP PRODUCER of the North Caroling Housing Finance Agencies Down Payment Assistance Program (NCHFA-DAP), NCHFA is advertising 6.375% 30-year fixed rate mortgages with $8,000 in down payment assistance, reduced PMI, and easier approvals on CONVENTIONAL, FHA, VA, and USDA loans.
Additionally, NCHFA has a DAP program where they offer 3% of the borrower’s loan amount in DAP at a rate of 7.25% on a Conventional 30 year fixed rate mortgage, and 7.125% on FHA, USDA and VA financing.
* PLEASE NOTE THAT YOU DO NOT NEED TO BE A 1ST TIME HOMEBUYER TO UTELIZE THE 3% IN DAP PROGRAM!
I hope you find value in this blog as we gauge our business for Spring, and Summer, and remember, your referrals mean everything to me, especially in a challenging market like the one we are in now.
Please let me know how I can help you if you are in the market to make a home purchase, or if you are an agent looking for excellent financing options.
In the meantime, be sure to make it a great day!
PLEASE CHECK NCHFA RATES AND APR’S on this site: