How to play the housing recession
While many are second-guessing whether or not we’re in an economic recession, there’s no doubt the housing recession is real. High mortgage rates and low inventory have would-be homebuyers waving the white flag. And it seems to be happening all at once. It’s almost like someone is slamming the brakes on the housing market. Because of the dramatic slowdown, we’re also seeing builders and home sellers lower their prices.
As prices decline, make sure you’re pre-qualified with your lender, be patient and ready to act. We could see sellers get a little panicky in the weeks ahead and lower home prices faster than anticipated. If so, you could snap up your dream home without busting your budget.
Rates back below 6 Percent!
This goes to show just how volatile rates are right now. And how important it is to stay in close contact with your lender, so when rates drop like this, you’re ready to lock in. The 30-year fixed rate recently clocked in at 5.97%. For many homebuyers, this still feels astronomical, and yes mortgage rates have more than doubled since last year.
Now for a little perspective. Do you know what the average mortgage rate has been since 1971? Try 7.76% for a 30-year fixed! Yikes, indeed! Today’s mortgage rates are a bargain compared to historical averages.
What’s scheduled for this week?
We’re one week away from the Fed’s next monetary policy meeting and they’ll be looking closely at the economic numbers coming out this week. Even if the economy shows inflation is weakening, don’t expect the Fed to change its mind. All indications are we’re still on track for another interest rate hike of 75-basis-points, with the Fed’s year-end goal of pushing benchmark rates up to 4%, and slightly higher in 2023.
Tuesday:
Consumer price index
Federal budget
Thursday:
Initial jobless claims
Continuing jobless claims
Friday:
UMich consumer sentiment index
Pre-Approval
in 10 minutes?
in under 10 minutes. Grab a few important documents to get started.
- Tax Returns
- Copies of W-2s (or 1099s for independent contractors,
freelancers and the self-employed) - A payroll stub
- A bank statement
- Loan obligation info (student loans,
auto loans and credit cards)
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.
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.