With the FOMC (Federal Open Market Committee) winding down their monthly purchases of US Treasury and Mortgage Backed Securities (Pools of Actual Mortgages) it is not surprising to see Mortgage rates, specifically the 30 year rate move up, FOR NOW!
Key Technique for New Mortgages
Knowing you may not read the entire article… we are all busy, so completely understand, the meat of the following information is think twice before trying to “buy down” your mortgage rate. Yes, they (rates) have gone up and yes it is more than just a few quarters ago, but it is entirely likely that the next economic slowdown will welcome in lower rates. If you pay a lot of money to lower your rate now … your hurdle to refinance in the future is much greater!
Mortgage Rates Review
While we may think recent rates are sky high… let’s take a longer term view.
Source: Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MORTGAGE30US, February 22, 2022.
The Short Term View looks much different
Source: Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MORTGAGE30US, February 22, 2022.
Between FOMC lowering their monthly artificial purchases, interest rate markets front running the FOMC and a slight reversion to the mean … rates are higher than recently… but think twice before “buying down” that rate!
Have a Great “Mortgage Rate Analysis” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
Thoughts from Barry Habib, Housing and Mortgage expert, from this year‘s 2022 Mauldin SIC Investor Conference…
For those of you with a memory like an elephant, congratulations, you may recall that we have delightfully attended the Mauldin Strategic Investor Conference (SIC) virtually during lockdown for the past two years. As a side note, a conference that we had never attended before due to the duration and the timing … very near tax time!
Good news, once again this year the conference was virtual and we are happy to attend.
While there were 40+ speakers, more to come on others, we found the following expert and presentation very interesting, if not somewhat controversial.
Barry Habib, Mortgage and Residential Housing Expert
You may recognize Barry as he is a regular speaker on many of the financial channels among other and was a presenter at this year’s SIC conference.
Cutting to the chase, Barry expects a recession later this year or early 2023 and as such expects mortgage rates in particular to drop precipitously from their current 5 1/2% rate along with all rates of other asset types.
These expectations, (forecasts), are certainly more economic and financial market related, as such we will make note as predictions and check back sometimes next year.
Now, to Barry’s wheelhouse, what we are all interested in, the expectation of housing appreciation or depreciation!
Understanding that Barry comes from a residential and mortgage background, so let’s be transparent that there may be some innate biases, but his expectations are for mid to low single-digit housing appreciation for this year 2022.
This flies in the face of many forecasters due to the aforementioned slow down or R- word recession and more importantly the heightened interest rates of Mortgages currently.
In Barry’s defense, lack of supply and his expectations of a sharp reversal in mortgage rates will lend itself to this continued growth.
Heck if housing prices hold their values we would consider Barry’s prediction a win.
There will certainly be pockets of strength and weakness across the country…
We will be watching as it’s very easy to monitor and will let you know!
Barry …thanks very much for a fantastic presentation and for the information duly noted…
Have a Great “Housing Analysis and Forecast” Day!
John A. Kvale CFA, CFP
Share this:
Like this:
Leave a comment
Posted in Debt - Debt Management, Economy, Forecast, Interest Rates, Investing/Financial Planning, Market Comments
Tagged Barry Habib, Interest Rates, Mauldin, Mortgage Rates, Residential Housing, SIC Conference