Early last week mortgage interest rates for the 30-year fixed were down to near 5.0%, then they bounced up to 5.5%, then down a bit, and now back up this morning to 5.66%. Experts speculate that the technical recession compared to the strong U.S. jobs report are creating some consternation in the bond market.
Typically a weaker economy slows demand, but with more people going back to work with money to spend, inflation could continue. Industry insiders expect rates to chop until the next Federal Reserve meeting in September.
Home prices climbing?
While some in the real estate industry see a home price correction on the horizon, Zillow predicts prices will grow another 7.8% by June 2023.
For context, current annual home value growth is around 19.8%. making Zillow’s prediction more of a slowdown. The Fed’s determination to curb inflation through interest rates hikes, and weaker consumer sentiment are contributing to the down numbers. Still, we’re in one of the strangest real estate markets ever and next week or month could change everything.
Better Credit, Better Rates
Your credit score is one of the most important factors lenders look at.* A better credit score makes you a better risk, which could give you access to lower interest rates.
So, what are some simple things you could do to improve your credit score? Pay your bills on time and pay down the balances on your credit cards. Not just the monthly minimums. Use less than 30% of your credit card limit on your cards. In this case, less is better.
On top of that, ask for a higher credit limit and it will lower your utilization even more. Issuers report payment behavior to the credit bureaus every 30 days, so these steps can help your credit quickly.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply. All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Guaranteed Rate does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Guaranteed Rate. Guaranteed Rate & its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.
* Guaranteed Rate does not provide credit counseling or credit repair services.
All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Guaranteed Rate does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Guaranteed Rate. Guaranteed Rate its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.
John Kistner is Guaranteed Rate’s Market Analyst. Market Updates are designed to provide readers with a high-level yet insightful view of how economic news, events and trends affect mortgage rates and the homebuying process.