As the Federal Reserve moves to curb the alarming inflation rate, the rapid rise of mortgage interest rates in 2022 continues to trouble housing economists, mortgage brokers, and homebuyers.
In a market that has gone way over the predicted 4% for this year to over 7%, Shahram Sondi (NMLS 186790), Principal loan originator and Certified Mortgage Advisor from Florida, provides some insight on what homebuyers can expect.
Mortgage Rate Projections
As a licensed Florida mortgage originator, Shahram Sondi keeps a close eye on interest rate developments and the ripple effects these have on Florida mortgage rates.
“Increasing mortgage rates have led to a slowdown in home sales and home prices in some areas, creating a climate of uncertainty in potential sellers and buyers for what they can still expect,” says Sondi.
With interest rates at their highest point in over twenty years, the sales of previously owned homes have fallen almost 3%. Two other major concerns for future home buyers are the effects of the continued geopolitical tension and the potential of the economy sliding into a recession.
No one can predict at what price 30-year and 15-year mortgages will peak because it all depends on when the Federal Reserve will manage to get inflation to start receding and ease interest rates accordingly.
If inflation remains high, then mortgage rates will keep climbing, according to the increases made by the Fed. That could mean interest rates could rise to over 8.5% within the following year. On the other hand, if they manage to reverse inflation, we could see them stabilizing to just over 6%.
There is one final scenario of continued interest rate hikes. If the country slides into a recession, interest rates may drop dramatically to about 5%.
This website can give you accurate daily insight into current mortgage rates in Florida.
Buyers and Sellers Both Holding Back
Despite a drop in the median home price to $427,000, it remains high for a huge segment of the buyer’s market that needs to earn at least $90,000 annually to afford a home in this price range.
The increased annual cost of financing a home affects newcomers to the housing market and those considering an upgrade. As a result, newcomers adopt a wait-and-see attitude, and move-up buyers prefer to delay their purchase plans, staying with their current lower interest rates, which are at least half of the current rates.
Real estate agents have seen an increase in the time homes spend on the market, and Sondi sees the trend continuing in every type of mortgage rate scenario. However, the slowdown in sales does not necessarily mean a more extensive inventory, and a low stock won’t result in significant price decreases or significant increases.
Shopping For Florida Mortgage Rates
According to Shahram Sondi, securing the best mortgage rates in Florida has become an emotional roller coaster ride for first-time homebuyers.
He expands on this by adding, “The process of getting good mortgage rates starts long before ever considering applying. Home Buyers must pay attention to several factors. These include having the correct credit score, a good employment record, a solid down payment, and a good understanding of their debt-to-income ratio.”
Sondi insists that consumers must also get quotes from multiple mortgage companies when shopping for the best rates. “Smaller mortgage brokers tend to have lower acquisition costs in the current market,” he tells us, “and they can offer home buyers lower mortgage rates than the national average, typically as much as 1% lower.”
Besides offering lower rates, independent mortgage brokers can offer several other benefits, including not maintaining regular business hours. More personalized service and working outside banking schedules make sense for busy homebuyers.
When shopping for a home mortgage, consumers will do well to compare Wells Fargo mortgage rates, Chase mortgage rates, Rocket mortgage rates, and USAA mortgage rates with those offered by a small mortgage broker like Mortgage Expert.
Many people avoid borrowing money for a mortgage in times of uncertainty. Still, for others, the relatively flat housing market allows them to lock in a relatively low purchase price. When shopping for the best Florida mortgage rates, buyers can look to smaller brokers like Mortgage Expert and secure a personalized service and a lower mortgage rate.