Who wants to talk about mortgage rates? No one, right? It’s like eating your vegetables—necessary but not enjoyable. Nonetheless, since you’re here, we’ll make a bumpy topic easier to digest. Bear with me; we’re headed on a roller-coaster ride of higher mortgage rates and blistering housing challenges. Don’t worry, though; this isn’t all gloom and doom. You’ll find some useful tips and even a few witty remarks along the way. Let’s do this!

Mortgage Rates Soaring Over 7% – And Might Not Be Done Yet!

Maybe you’ve heard the news. The little number expressing your mortgage rate just barged through the 7% door for the first time since… well, this year on April 18. Now, according to Freddie Mac’s latest report, the average 30-year fixed-rate mortgage is lounging around 7.17%. As if that weren’t high enough, it could keep on climbing. In other words, don’t bet on a dramatic tumble in mortgage rates anytime soon.

Freddie Mac’s deputy chief economist, Len Kiefer, reminds us that predicting mortgage rates is about as easy as forecasting the weather (it’s not, folks). So while he can’t say for sure, he can suggest we be ready for a further climb. He also pointed out that ongoing inflationary troubles are likely driving this chaos. Now, isn’t that just peachy!

Just How High Could These Mortgage Rates Go?

Ringing in 2024, our crystal balls predicted a slow and steady drop in mortgage rates. Well, the track has turned upside down, and we’re all trying not to spill our coffee. Bob Smith, Real Estate Head at Advisor Credit Exchange, is banking on rates hovering in the high 6% to 7% range for the rest of the year. But hey, things could change, right?

As we squint towards the future, both Kiefer and Smith are hoping inflation will throw us a bone and ease off a bit, maybe even nudging these inflated mortgage rates back down. But, don’t get too excited; they don’t see them dropping as far as we initially thought. Bummer, isn’t it?

Rising Mortgage Rates And Their Impact on You

Well, isn’t this just dandy? The mortgage rates decide to spike right in the middle of peak home buying season. Who wouldn’t love that added pressure? With soaring mortgage rates, ballooning home prices, and a waning supply of homes for sale, the result is exuberant monthly payments, causing many potential homebuyers to tap the brakes.

Existing homeowners aren’t thrilled either. Many are choosing to stick with their low-rate mortgages rather than trading up and plunging into the deep end with a higher-rate mortgage. But before you homebuyers start hyperventilating, Scott Bridges, Pennymac’s Chief Consumer Direct Production Officer’, offers soothing words: “These rates are temporary. In time, they’ll come down.” So, deep breaths, everyone!

Some Sage Advice For Navigating These High Mortgage Rates

Rather than fret over the unfriendly mortgage rates, concentrate on things you can control in the homebuying process. Here are some nuggets of wisdom to keep you on track:

• Keep an Eye on Your Credit Score: The better your credit score, the better your chances of scoring (pun intended) a good mortgage rate. Bridges advises, “Every little bit of debt matters.”
• Never Shy From Negotiating: Use these high rates to your advantage. With fewer competitors in the market, you might have a better shot at haggling.
• Broaden Your Search: While it’s hard to resist a fully furnished, ready-to-move-in home, looking at properties that need a little TLC might get you more bang for your buck.
• Stick to Your Budget: Just because a lender says you can afford a certain amount doesn’t mean you should spend it all. Have a budget ceiling in mind and stick to it.
• Don’t Get Cold Feet: Buying a house is a big deal, and rushing through it won’t do you any favors. Inspect the property thoroughly and don’t overpay. Remember, “Patience is key,” as Bridges recommends.

Now, if you’ve chewed through all this and are still hungry for more, check out these additional resources:

• 8 Best Mortgage Lenders for May 2024
• What to Look for When Buying a Home
• The Current Cost of Buying a House Is Reaching New Records

So, are you ready to dive into the deep end of the housing market? Why not check how much you qualify for with trusted lenders and plan your homeownership journey, even in this not-so-friendly mortgage rate environment.