Where Mortgage Rates Will be Next Year…Guaranteed

The big question on everyone’s mind is where rates will be in 3mos, 6mos, a year or two years out etc.

Many people spit out various theories referencing inflation or ‘election year’ or The Fed’s latest rate hike or mortgage bond 200 day moving averages or or or or or. Let’s step away from the future telling theories and ask why ‘everyone’ wants to know.

Mortgage companies are overstaffed and wondering if they should do layoffs or hold on for the next small refinance boom. Title and other companies are in the same boat. They would all like to know so they can set the best direction for their business.

I’m sure that Wall Street speculators want that crystal ball so they can make the right money moves and become the next overnight millionaire.

But, let’s address the most grassroots reason that most people want to know. Homebuyers want to know when they can afford to get their family into the best home possible. The media is riddled with headlines like “Houses sitting as rates are skyrocketing along with house prices”. A couple days later it might read “Rates starting to drop and a rush on houses expected”. How can a homebuyer decipher this media teeter-tottering and make a good decision for their family? The short answer is they can’t.

Let’s take that a step further. Neither can experts. They don’t have a crystal ball. They don’t have foolproof algorithms. Their advanced economics degrees can’t assure they are correct with their best guesses. They just can’t do it…but I can.

It’s very easy. Anyone can do it with the slightest amount of research. FIND A HOME WITH AN ASSUMABLE LOAN. That rate will be the same next year as it is today. If you find one with a 3.00% rate…guess what…it’s always going to be 3.00%. This is the way many buyers are getting into the neighborhoods and school districts they thought they were priced out of. On average buyers can level up their purchasing power by 150-200k by assuming the lower interest rate loan versus getting one at current market rates.

With assumptions still in their infancy, the opportunities are widespread. Once this vehicle to lower payments and upgraded purchasing power becomes more mainstream, the ample assumable home loan selection will surely start to become picked over…like the Black Friday deal bins of old.