Here's the Future of Mortgage Rates

Counting the wrong predictions on mortgage interest rates can be a full time job. As is predicting what’s going to happen with housing prices. Current rumor mill is filled with speculation there is going to be another crash similar to what happened in 2007-8. There’s one huge difference between then and now: government policy.

Back in the earliest years of this century the U.S. Congress, in its wisdom, thought everyone should be able to buy a home. Affordability didn’t matter. That’s when the mortgage industry obliged and began offering what would become known as “liars loans”. All a home buyer had to do was tell a lender with little verification what their income and assets were and bingo, they’d qualify for almost anything. These loans were then packaged up as sub-prime mortgages and sold in the secondary market. Then the chickens came home to roost and the result was, wait for it, a CRASH of home prices. That is not happening today.

When you apply for a VA Loan with us at VALoansMN Brad is going to ensure you can afford it. He’ll ask about your income and assets. He’ll look at your credit history. Do not fear this inquiry. Brad wants you to qualify but he also wants to know a mortgage payment is not going to put an undue burden on you and your family’s finances. A negative on your credit report doesn’t necessarily disqualify you from getting a mortgage. At VALoansMN we look at the whole picture, not just credit history. Some of us have stumbled financially but that doesn’t mean you can’t walk upright again.

We cannot predict for certain what will happen to home prices just as we cannot predict the future of mortgage rates. We are seeing some home price reductions but it may be sellers are now pricing their homes at the point they should have been in the first place. We have seen a cooling in the market but there is still a great bit of demand. 

Mortgage rates went from under 3% a year ago to 6% or so. That was a shock to home buyers who still viewed current rates through the lens of 2021. But, as we have written on these pages, a rate of 4.5, 5 or even 6 percent is still a bargain. With inflation above 9% (and climbing) you’ll be paying that 5% mortgage back with low cost dollars. Where are rates headed? We don’t know. No one knows. We predicted 2 years ago the cheap money would come to an end and it has. But we didn’t know when. 

When you hear some prognosticator talk about the future of mortgage rates or, for that matter, the future of home prices, we recommend you take that information with a grain of salt (sorry for the repeated use of cliché's but they do seem to accurately describe the situation you might be in). 

At VALoansMN we are here to help you travel a road to financial success. We want to HELP you in that journey. It doesn’t cost anything to talk so give Brad a call and let’s see how we might help you achieve your goals.