The State of Our Current Housing Market

In these uncertain times, a fluctuating market and increasing mortgage rates can make buying a house seem overwhelming, if not impossible. Founder and CEO of Christopher Paul Financial LLC (CPF Mortgage), Justin Kelly, recently released a statement regarding the state of our current housing market. In his statement, Justin described the reasons behind increasing mortgage rates, the status of the Federal Reserve, and how nationwide inflation contributes to the mortgage rates. 

Here is a breakdown of what you need to know about the state of our current housing market and your home buying options. 

Combating Current Inflation

In order to compensate for increasing inflation and nationwide economic concerns, the Federal Reserve is increasing interest rates. These increases are intended to slow the effects of growing inflation and stabilize the economy, in order to prevent another recession. Despite the surprisingly stable job market and strong wages, combatting a potential recession remains a top concern among the federal government and the American people alike. 

Last month, the Federal Reserve (Fed) raised interest rates by 0.75 percentage points, the largest rate increase since 1994. The Fed plans to announce its next rate increase decision on July 27th, taking the latest employment and inflation figures into account. According to The New York Times, an estimated 0.5- or 0.75-percentage-point rate increase is currently on the table. Although we will not know the final decision until later this month, economists are predicting a 0.75 increase, saying that this will be the best way to combat rising inflation and help stabilize the economy. 

What Do Rising Interest Rates Mean For You? 

While the Fed does not directly control mortgage rates, the proposed increased rate on federal funds will directly affect home financing options. As of July 6, 2022, the average rate on a 30-year mortgage is 5.55%. That is an increase of over 2% from this time last year. Unfortunately, as inflation rates increase, so do mortgage rates. The bright side is that inflation has not yet peaked and that the actions of the Fed are trying to prevent drastic economic ramifications. 

While there are elements of the mortgage rate increases that are out of the individual's control, there are several actions that you can do to ensure that you qualify for the best rate:

  1. Monitor your FICOยฎ credit score: maintaining a good credit score by keeping up with credit card payments is essential when applying for a mortgage loan. The better your FICOยฎ score, the lower your rate will be, regardless of economic conditions. 
  2. Take out a short-term loan: if you are looking to purchase a home soon, consider applying for a 15-year, fixed-rate loan instead of a 30-year loan. As time goes on and rates fluctuate, you can always refinance your home and apply for a longer-term, lower rate. 
  3. Pay more upfront: if you place a larger down payment on your home, this will lower your loan amount and thus the principal amount that accrues interest. 

CPF Mortgage is Here to Help

Navigating our current housing market and economic fluctuations can seem stressful but it doesn't have to be. CPF Mortgage is here to provide our community with the best interest rates available and expert home-financing support devoted to your customer care. If you're interested in refinancing or purchasing a home, or if you want more information on our current market please reach out by filling out our contact form.

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Christopher Paul Financial, LLC dba CPF Mortgage is a Florida Mortgage Lender (NMLS 222883), Florida State License MLD929, Colorado and Tennessee registered mortgage company located at 10710 State Road 54, Ste. C101, Trinity, FL 34655. All loan approvals are credit driven and all decisions are based on underwriting credit approvals. All rates, terms, and programs are subject to change without notice. Borrowers should consider their options carefully when choosing a loan program.