The year is about to end and so is the low mortgage rate party. Here’s what’s happening this week in mortgage and real estate news.
1. The refi window narrows
Rates went up a little in our weekly survey. It’s been a busy year-plus for cash-out refinancing with home prices soaring and mortgage rates near record lows. Now may really be the last chance to give yourself the gift of low-rate home equity borrowing, with most experts predicting higher rates heading into the new year. Take advantage of your equity cheaply while you can.
2. The Fed says rates are going higher
The Federal Reserve on Wednesday kept borrowing costs at near-zero percent but will now stop buying bonds three months earlier than initially planned. It also signaled three interest rate hikes in 2022. These steps will ultimately accelerate the end of economic stimulus and lay the groundwork for higher rates next year.
3. Inflation and mortgage rates
Inflation hit 6.8 percent in November, its loftiest level since the long-ago era of Reaganomics and America’s war on inflation. If prices continue to soar, mortgage rates will head higher, too. But there’s a silver lining to this cloud for borrowers as well.
4. Housing Heat Index: Which states are hot, which are not
Utah home prices have been soaring as Californians stream into the state. Utah boasts the nation’s strongest pace of job growth, along with rock-bottom unemployment, ultra-low mortgage rates, few mortgage delinquencies and low state and local taxes. See how your state is faring.
5. How the Fed affects ARMs, HELOCs, home equity loans
The Federal Reserve’s interest rate decisions influence the rates you pay for home equity loans, HELOCs and adjustable-rate mortgages. The central bank in December signaled that interest rates are going up from the current record lows in 2022 with at least three rate hikes, so if you have a loan with a variable rate, you should understand the stakes.
