Real estate developer Andrew Shader confirms that the current record-low mortgage rates present an excellent opportunity for home buyers. Low mortgage rates mean you can afford more home for your capital, locking in a greater long-term value increase when you purchase.
What Should Home Buyers Do Today?
As mortgage rates hover near record lows, homebuyers must take advantage of the current market conditions. Waiting a few weeks or months to purchase a home could prove costly as mortgage rates steadily rise in 2022.
According to Freddie Mac, the average interest rate on a 30-year fixed-rate mortgage was 3.10% at the end of November 2021. Although 30-year fixed-rate mortgages hit as low as 2.65% in January of 2021, this was due to monetary easing caused by the pandemic.
If we see widespread COVID surges into 2022, mortgage rates could potentially go lower or remain unchanged. As such, it’s difficult to time the market in current conditions. For this reason, the best plan of action is to understand your options and that regardless of the future, current mortgage rates are hovering near low records.
If COVID continues dwindling, you can expect mortgage rates to steadily rise throughout 2022.
Opportunity to Refinance Your Mortgage
Homeowners looking to refinance their mortgage can also take advantage of near record-low mortgage rates. Andrew Shader believes that homeowners should consider refinancing if their current mortgage rate exceeds today’s mortgage rates by 0.75%.
Black Knight’s September Mortgage Monitor found that nearly 12 million homeowners can qualify for refinancing and cut their rates by at least 0.75%. It’s essential to determine whether your home is eligible for refinancing and how much money you can save in the long term. The sooner you act, the more you can save.
Will Mortgage Rates Rise in 2022?
The rise in inflation over the past year indicates that the Federal Reserve will increase interest rates to combat it. An increase in federal interest rates will also increase mortgage rates.
Mortgage rates have dropped to record lows as the Federal Reserve kept money cheap to help the housing market during the pandemic. However, an increase in mortgage rates could potentially force some home buyers out of the market altogether.
The Mortgage Bankers Association predicts that the average 30-year fixed mortgage rate will reach 3.7% in the third quarter of 2022 and 4% by the end of 2022. This rate would be a substantial increase from the current 3.10%, so it’s important to take advantage of current market conditions if you’re interested in purchasing a new home.
About Andrew Shader
Andrew Shader is a real estate investor, developer, and entrepreneur based out of Fort Lauderdale. Shader started as an entrepreneur in the insurance industry before discovering his real estate passion: finding scalability in any vertical. Andrew’s real estate strategy specializes in finding value-added properties and increasing their property value by upwards of 60% — without needing to rely on future appreciation.