Although many economists try to forecast where mortgage rates (and interest rates) are going, they aren’t always accurate. An excellent example of this happened early this year. Andrew Shader, a Ft. Lauderdale real estate entrepreneur, explains this year’s mortgage rates.
As 2021 came to a close, many experts projected that mortgage rates would increase gradually in 2022 and that we would see numbers in the high 3% range. However, those rates had already climbed well past that number by April and had hit 4.72%. Not long after Freddie Mac announced this rate, the Mortgage News Daily reported an average mortgage interest rate of 5.02%.
Mortgage Rates Are on a Quick Climb
The good news (especially for sellers of homes) is that even though rates have risen much more quickly than even the most aggressive forecasts had predicted, the increase in mortgage rates hasn’t significantly impacted purchaser demand. In fact, in the first quarter of 2022, the number of showings, home prices, and homes receiving multiple offers increased significantly. Despite rising mortgage rates, property purchase is still possible through various funding options. For instance, veterans can take advantage of the flexible and competitive rates from Security America Mortgage
Andrew Shader explains that higher wages and low mortgage rates helped offset increasing housing prices. However, since mortgage interest rates have approached 5% and home prices have soared over the past couple of years, homebuyers may be struggling to find properties they can afford comfortably.
Where Are Mortgage Rates Going from Here?
When the world suffered from the onslaught of the pandemic in 2020, the Federal Reserve was lenient and pegged the interest rates near zero in response to the economic effect of the global health crisis. This enabled the industry to keep mortgage rates very low. However, with the gradual return of the economy to its usual activity, the expectation for mortgage rates is to rise alongside inflation.
With inflation rates increasing at record levels, most economists and experts agree that property and mortgage rates will follow suit in the months ahead. Consumers considering home buying should know that these increasing rates will significantly impact their monthly housing payments. The bottom line is that if you’re considering purchasing a home, the time to do so is sooner rather than later.
Even though it’s impossible to predict precisely where mortgage rates are going, it’s a good bet that the days of 3% mortgage rates are long gone. Likewise, if things continue to progress as they have been, the days of 4% mortgage rates will be over, too.
Even small increases in mortgage rates on the average 30-year fixed-rate loan will add up to thousands of dollars homeowners will pay over the life of that loan. An experienced real estate professional will be able to help you locate properties and put together offers that will put you ahead of the competition, enabling you to lock in today’s mortgage rates before they go any higher.
The real estate industry can be pretty cutthroat, but there are many opportunities to earn if you know the best approach. Real estate is one of the most reliable investment options because they’re less volatile than others like stocks and cryptocurrencies. If managed wisely, it has an edge even amidst inflation.Â
For those looking to diversify their portfolio with real estate investments, it’s best to be on the lookout for many factors, including global economic trends and new policies rolled out by the Federal Reserve. This may seem overwhelming, but subscribing to credible news sources will help. You can access the necessary mobile applications to check trends in real-time.Â
Developer and Investor Andrew Shader
Andrew Shader is a real estate developer, investor, and entrepreneur in Ft. Lauderdale, Florida. He founded his real estate business in 2016 after cultivating a background in accounting, training, insurance, leadership, and technology. Mr. Shader is a graduate of Florida State University, having earned a bachelor’s degree in business, marketing, and management.
Since he began his real estate business, he has built a portfolio around his strategy of focusing on value-added properties. Andrew Shader purchases properties not for what they currently are but for what they could be, and then he brings them to their full market potential. This philosophy has led to more than 60% increase in property values without relying on future appreciation.
