Yesterday, the yield on the 10 year Treasury bond hit a high of 4.8% which lead to the average 30 year fixed mortgage rate hitting a 23 year high. It toped at 7.7%. A year ago from today they were 6.6%. What about mortgage applications?
According to Mortgage Bankers Association’s Survey, applications decreased another 6% from last week. Which is 22% lower than this time last year, hitting a 27 year low for applications.
So you’re wanting to buy… what can you do?
- Adjustable-rate mortgage (ARM) – These loans are becoming more popular, as some borrowers look for ways to lower their payments. ARMs have been hovering around 3% to 4% in recent years, but 30-year conventional loans have been available for lower interest rates. At the beginning of 2023, many experts expected mortgage rates to fall to around 6% by the end of the year. However, now some experts believe that rates could hit 8% or higher, and next year they should dip back into the high 6%’s.
- Seller Financing – Seller financing is a type of real estate transaction where the seller finances the purchase for the buyer, instead of a bank or other lender. This means that the buyer makes monthly payments to the seller, plus interest (usually between 5% – 7%, lower than the 30 year fixed), until the loan is paid off. Seller financing can be a good option for buyers who have difficulty qualifying for a traditional mortgage, or who want to avoid the high interest rates that are currently prevailing. It can also be a good option for sellers who want to sell their home quickly or who want to get a higher sales price.
Hope this helps anyone looking to purchase a home!
Thanks for reading,
Chris
