Mortgage Trends: Here's What We Know - Q1 2022
Aran Nafisi
Speed, Communication, Transparency & Results: A Mortgage Experience You Can Expect
As we look back at the first quarter of 2022, a lot has happened in the mortgage lending space, including company-level mergers and acquisitions, the Fed raising short-term rates, refinance activity slowing to a halt, and inflation reaching a 40-year high. Here's how we're seeing these things play out in the mortgage marketplace for consumers.
Mortgage Rates: Rates have increased considerably since the start of the year and in many cases are 1-2% higher than where they were in 2021. If you only looked at the two most recent years, then yes, mortgage rates are higher today than were they were most previously. But if you looked at the rest of the history of mortgage rates, let's say over the past 50 years, then you might say today’s rates are actually pretty good. It just depends on how you look at it.
Conforming vs. Jumbo: We are seeing a huge discrepancy in interest rates for conforming loans versus jumbo loans. Last year, the difference was maybe an eighth to a quarter point. Today, the difference can be anywhere from a half percent to three quarters of a percent, depending on a person’s specific situation. Given the rate discrepancies, it is even more reason why you cannot compare your rate with your neighbor’s rate because every person’s rate is specific to their unique situation.?
ARMs: We are having a lot more conversations with buyers about adjustable rate mortgages which tend to have lower rates than the average 30-year fixed mortgage. In fact, according to the Mortgage Bankers Association, the share of mortgage applications for adjustable rate mortgages has doubled in the last three months, which has coincided with the increase in the 30-year fixed mortgage over the same period.
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It is still very much a seller's market in the San Francisco Bay Area. We are helping home buyers determine their qualifying abilities so that they can write competitive offers while also keep a reasonable budget both on the home price and the amount they are borrowing on a mortgage.
Aran Nafisi, Guaranteed Rate Affinity, NMLS ID #1020766