If you are a first-time home buyer or looking to buy a house in Austin – keep reading! Today, we are here to tell you where mortgage rates are headed and how you can take advantage of them.
With inflation at its highest level in four decades, the Federal Reserve has indicated it will stop buying mortgage bonds in a few weeks, raise the Federal Funds rate mid-month, and then begin to liquidate its mortgage bonds sometime later in the year. “The market is so flushed with buyers because everyone wants to take advantage of the interest rates,” said Madison Waugh, Operations Manager for Friedman Real Estate.
Currently in Austin, Texas, rates are 3.92% for a 30-year fixed loan, 3.17% for a 15-year fixed loan, and 2.96% for a 5/1 ARM.
The blend of a less accommodative interest rate environment and an increasingly worker-scarce labor market led the Economic and Strategic Research Group (ESR) to downgrade its expectations for 2022 real GDP growth from 3.1% to 2.8%. However, its expectations for 2023 headline growth remained unchanged at 2.2%, a pace that approaches the long-run trend.
“Risks to the forecast include unpredictability over the future course of inflation, potential geopolitical developments in Eastern Europe, and currently unforeseen COVID-related disruptions to consumer behavior and the labor market,” said Josh Friedman, Friedman Real Estate Broker.
In addition to a slower pace of economic activity, the ESR expects housing activity to moderate from 2021’s highs. Single-family home sales are expected to decline 2.4% in 2022, a slightly deeper drop than the previously anticipated 1.2% dip due to increasing affordability constraints associated with rising mortgage rates. As measured by the FHFA Purchase-Only Index, the ESR currently projects home price growth of 7.6% in 2022 and 3.3% in 2023, down from last year’s record-setting 17.3%. With the 30-year fixed mortgage rate now projected to close the year at 3.7%, refinance activity, as a share of total single-family mortgage originations, is expected to decline to 36% in 2022 from 58% in 2021 and could move even lower if rates move further upward.
“Now is clearly the right time to purchase a home,” Josh said. “We can talk to you about your options, advantages and investment opportunities and give you the information you need to make the best decision for you, your family, your business and your financial situation.”
At Friedman Real Estate, we cover the greater Austin area and Texas Hill Country with experienced agents who can make the process seamless and enjoyable. And no one will work harder for you!
