December 28, 2023: "US pending home sales stuck at 22-year low despite dip in rates", a Yahoo Finance housing market update by Gabriella Cruz-Martinez included a few observations from HSH.com vice president Keith Gumbinger:
Overall, the average monthly payment for conventional loans was still up from $1,994 a year ago, the MBA noted, as rates are only part of the equation. That much was evident in the latest pending home sales data.
"Lower mortgage rates don't fix all the troubles in the housing market," Keith Gumbinger, vice president of HSH.com, previously told Yahoo Finance. "While they do help with affordability, they do little to increase the number of homes for sale in the market (which has throttled sales activity despite high financing costs), and the increase in buyer demand that lower rates may bring at the margins will likely serve to press home prices higher."
That shortage of inventory, however, coupled with pent-up demand could result in increased transactions in 2024. That may also have some consequences, warned Gumbinger.
"The drop in rates makes it more likely that prices will start heading higher earlier than normal in 2024," Gumbinger said, "and higher prices will erase some of the benefit of lower mortgage rates."
December 27, 2023: "Insider Insights: 12 Housing Market Experts Highlight Key Strategies For Home-Buying Success In 2024", a Forbes roundup of expert housing and mortgage advice for the coming year by Robin Rothstein featured HSH.com vice president Keith Gumbinger:
9. Pre-qualify Yourself
Before becoming attached to a home that requires a loan you can’t afford, Keith Gumbinger, vice president at mortgage website HSH.com, encourages prospective buyers to determine their income and debt loads ahead of time to get a sense of how much financing they qualify for.
"Borrowers should pre-qualify themselves at a few different interest rates to see whether or not a rate that is likely to appear in the next year is sufficient to allow them to participate in their housing market," Gumbinger says.
Plugging various rates into a mortgage prequalification calculator can help borrowers determine their maximum loan amount.
Pro Tip
Bonus Advice: "[B]e both opportunistic and flexible. A great house that checks 80% of the boxes and is available at a price you can afford with a mortgage rate that works well enough is likely to be better than waiting for a 100% match." - Keith Gumbinger, vice president at mortgage website HSH.com
December 21, 2023: "Falling mortgage rates lend a helping hand to home buyers", a Los Angeles Times look at the recent improvement in mortgage rates by Andrew Khouri included a forecast and comment from HSH.com VP Keith Gumbinger:
Keith Gumbinger, vice president of research firm HSH.com, predicted rates will bottom out around 6.4% in 2024 as economic growth and inflation remain elevated enough to prevent further declines in borrowing costs.
"Cheaper mortgage money doesn’t necessarily mean that cheap mortgage money is coming," Gumbinger said. "If you really want the lowest possible interest rates, you really have to hope for the most horrific economic climate."
Rates have fallen since October, however, in large part because multiple economic reports have signaled inflation is slowing.
December 21, 2023: "Buyers are tuned out, despite mortgage rates hitting lowest point since June", a Yahoo Finance housing market update by Gabriella Cruz-Martinez featured Keith Gumbinger, HSH.com's vice president:
While welcome news for some homebuyers, lower mortgage rates won’t be enough to mend affordability challenges plaguing most Americans. They have, however, rekindled some refinance activity.
"Unless it's a really compelling rate climate, mortgage and housing activity does slow measurably this time of year — there's your seasonal holiday effect," Keith Gumbinger, vice president of HSH.com, told Yahoo Finance. "The good news is that rates are down, and to the best levels since summer. The bad news is that they are only as low as they were during the summer, which to say not all that compelling an opportunity for buyers or those looking to refinance."
"Lower mortgage rates don't fix all the troubles in the housing market," Gumbinger said. "While they do help with affordability, they do little to increase the number of homes for sale in the market (which has throttled sales activity despite high financing costs), and the increase in buyer demand that lower rates may bring at the margins will likely serve to press home prices higher."
December 18, 2023: "Mortgage Rates Will Fall in 2024, but When? Here’s What Experts Think", a CNET Money forward-looking article by Katherine Watt that featured an outlook by Keith Gumbinger, vice president of HSH.com:
How homeseekers should prepare during the holidaysMortgage rates will eventually drop to 6%, but it won’t happen overnight. Though that’s frustrating for prospective homebuyers, it might be a good thing in the long run, according to Keith Gumbinger, vice president of mortgage site HSH.com."Mortgage rates coming down too quickly would simply goose demand, thinning out already thin inventories of homes for sales, and driving prices higher in return. A slow, steady pace of reduction is likely a better outcome for rates," Gumbinger said.
December 15, 2023: "The 2023 Winter Real Estate Market ", a National Association of Realtors radio program and podcast hosted by Stephen Gasque featured HSH.com vice president Keith Gumbinger discussing changing Fed policy, mortgage rates and qualifying conditions for homebuyers this winter.
December 14, 2023: "Housing Market Predictions For 2024", a Forbes 2024 housing market outlook by Robin Rothstein that included a discussion of potential conditions by HSH.com VP Keith Gumbinger:
When Will the Housing Market Recover? For a housing recovery to occur, Gumbinger says several conditions must unfold.
"For the best possible outcome, we’d first need to see inventories of homes for sale turn considerably higher," Gumbinger says. "This additional inventory, in turn, would ease the upward pressure on home prices, leveling them off or perhaps helping them to settle back somewhat from peak or near-peak levels."
And, of course, interest rates would need to cool off.
But Gumbinger says don’t hope they cool too quickly. Rapidly falling rates could create a surge of demand that wipes away any inventory gains, causing home prices to rebound.
"Better that rate reductions happen at a metered pace, incrementally improving buyer opportunities over a stretch of time, rather than all at once," Gumbinger says.
He adds that mortgage rates returning to a more "normal" upper 4% to lower 5% range would also help the housing market, over time, return to 2014-2019 levels.
Yet, Gumbinger predicts it could be a while before we return to those rates.
Should I Wait Until 2024 To Buy a Home?
Gumbinger agrees that it’s hard to tell would-be homeowners to wait for better conditions.
"More often it seems the case that home prices generally keep rising, so the goalposts for amassing a down payment keep moving, and there’s no guarantee that tomorrow’s conditions will be all that much better in the aggregate than today’s."
December 5, 2023: "Mortgage Rates Could Drop Before 2024. But That All Depends on December’s Economic Data", a CNET Money look at trends for interest rates by Katherine Watt contained some observations from HSH.com vice president Keith Gumbinger:
Given the pent-up demand for homes, any small decline in mortgage rates could entice some prospective buyers to act now. But while the drop of a few percentage points in a mortgage rate can certainly be helpful in lowering a monthly payment, it won’t fundamentally alter the affordability equation.
"For potential homebuyers who can qualify at today’s interest rates and home price levels, I would think the greater difficulty is finding a desirable and affordable home to buy," said Keith Gumbinger, vice president of mortgage site HSH.com. "Dips in mortgage rates may come unexpectedly, so it can pay to be opportunistic and nimble in order to capture any dip if it comes." If you’re anxious to buy a home, it helps to get your paperwork in order and be ready to lock in a rate when it comes along.
Gumbinger also notes that buyers might consider a "float-down" option on a rate lock, allowing you to lock in a rate you can afford on a mortgage application while still reserving the opportunity to relock at a lower rate if conditions become more favorable.
November 16, 2023: "Mortgage Forecast for November 2023: Cooling Inflation Is Encouraging for Mortgage Rates", a CNET Money review of changing interest rate conditions by Katherine Watt included some observations from Keith Gumbinger, HSH.com's vice president:
Expert advice for homebuyers
"For potential homebuyers who can qualify at today’s interest rates and home price levels, I would think the greater difficulty is finding a desirable and affordable home to buy," said Keith Gumbinger, vice president of mortgage site HSH.com. "Dips in mortgage rates may come unexpectedly, so it can pay to be opportunistic and nimble in order to capture any dip if it comes." If you’re anxious to buy a home, it helps to get your paperwork in order and be ready to lock in a rate when it comes along.
Gumbinger also notes that buyers might consider a "float-down" option on a rate lock, allowing you to lock in a rate you can afford on a mortgage application while still reserving the opportunity to relock at a lower rate if conditions become more favorable.
November 9, 2023: "More People Are Applying for Mortgages. Is That a Good Sign for the Housing Market in 2023?", a CNET Money update on housing market conditions by Katherine Watt included a look at the seller side of the market by HSH.com VP Keith Gumbinger:
Sellers are also struggling
Sellers may have the upper hand in today’s market, but they aren’t immune to today’s adverse housing market conditions, says Keith Gumbinger of HSH.com.
Homeowners who purchased prior to 2022 have much lower mortgage rates than today’s rates. As a result, many are reluctant to sell their house and buy a new one with a more expensive mortgage attached. This phenomenon is known as "golden handcuffs," leaving many homeowners feeling stuck without recourse to sell or refinance. If they were to sell, they’d face the same low housing supply and inflated prices as everyone else, Gumbinger notes.
November 3, 2023: "Mortgage Rates Are Easing a Bit. That’s Good News for Buyers - and Investors.", a Barron's review of an improvement in mortgage rates by Shaina Mishkin featured some commentary by HSH.com vice president Keith Gumbinger:
The lower rates may not get buyers off the sidelines just yet. If the recent decline in Treasury yields holds, Freddie Mac’s rate next week could drop as much as a a quarter of a percentage point or more to around 7.5%, says Keith Gumbinger, vice president of mortgage website HSH.com
Such a decline would save the buyer of a $400,000 home roughly $60 a month. That’s unlikely to do much to change buyers’ financial ability, or willingness, to buy a home, says Gumbinger - but optimism might be the more valuable takeaway. The potential drop "might offer a little encouragement that rates have stopped rising, and may even find more reasons to decline if inflation continues to settle and the Fed remains on the sidelines," he says.
November 3, 2023: "How the Federal Reserve’s Rate-Hike Pause Affects Mortgage Rates", a CNET Money look at the implications of the Federal Reserve's actions by Katherine Watt featured an observation from Keith Gumbinger, HSH.com's vice president:
In an inflationary environment like today’s, the Fed uses rate hikes to make borrowing money more cost-prohibitive. Banks typically pass along rate hikes to consumers in the form of higher interest rates for longer-term loans, including home loans.
"At this stage of the rate-hike cycle, it’s more about what the Fed says than what it does," said Keith Gumbinger, vice president of mortgage site HSH.com. The first step toward lower mortgage rates would be for the Fed to signal that it’s done hiking rates, he said.
October 11, 2023: "Pinched homebuyers turn to adjustable-rate mortgages to make the payment math work", a Yahoo Finance/AOL look at mortgage alternatives by Janna Herron include a bit of advice from HSH.com VP Keith Gumbinger:
The uptick reflects how buyers still in the market are turning to other options that provide a lower interest rate - even if slightly riskier - to combat housing's intractable affordability challenges.
"With fixed mortgage rates as high as they are, it's even more important to consider other loan options and weigh them against your potential time frame," Keith Gumbinger, vice president of HSH.com, a mortgage data resource provider, told Yahoo Finance. "An ARM may afford you all the fixed-rate mortgage you actually need, and at a lower cost than a loan that is fully fixed for its entire term."
October 5, 2023: "8% Mortgage Rates Are on the Horizon - and May Stick Around", a Barron's review of mortgage-rate conditions by Shaina Mishkin included a few observations from Keith Gumbinger, HSH.com's vice president:
Higher rates wouldn’t only impact buyers. They would also intensify the low supply of previously owned homes for sale, said Keith Gumbinger, vice president of mortgage website HSH.com.
That could help support new home sales - with limits, Gumbinger said. Builder ability to drive sales through the use of incentives, such as mortgage rate buydowns, gets more difficult as rates get higher.
"Potential borrowers would likely have rather more difficulty qualifying at 8%, and offering them a temporary 2% break on the rate still leaves it at 6%, rather high compared with not long ago," Gumbinger said.
September 26, 2023: "This resilient part of the housing market is cracking", a Yahoo Finance update on changes in the new home construction market by Gabriella Cruz-Martinez featured some observations from HSH's weekly MarketTrends newsletter, written by HSH.com vice president Keith Gumbinger:
"Tight inventories of existing homes for sale have pushed some buyers toward the new construction market. That said, that market is, of course, also affected by uncertainty and higher financing costs, although builder incentives can help offset these to some degree," Keith Gumbinger, vice president of HSH.com, wrote in his weekly Market Trends analysis. "Homebuilder moods are starting to reflect the change of seasons and in market conditions. Builders may have a bit more of the blues in September because building activity slowed in August."
That would put even more pressure on homebuilders to offer incentives to close on deals, something that’s happening already.
"A majority of builders are using incentives, including trimming prices and offering financing assistance," Gumbinger said ahead of the report. "We’ll learn how successful those incentives were in getting buyers to sign the dotted line."
September 14, 2023: "Mortgage rates stuck above 7% for over a month", a Yahoo Finance update on challenging housing market conditions by Gabriella Cruz-Martinez featured some observations from HSH.com VP Keith Gumbinger:
"There's not a lot of reason to expect any immediate change for the better as far as mortgage rates go," Keith Gumbinger, vice president HSH.com, told Yahoo Finance. "We'll get more clarity after the next Fed meeting; no increase in policy rates is expected, but I think there's yet a chance of another hike yet this year as growth, labor markets and inflation all have remained either stronger or higher than expected for a while now, despite high interest rates."
All eyes will be on what the Fed says next week at its next rate-setting policy meeting.
"Right now, it's more about what the Fed has to say about their expectations for the path for monetary policy in the future than whether or not another small hike in rates is coming or not," Gumbinger said. "Even if it comes this fall at some point, another quarter-point hike doesn't move the needle very much, since more than five percentage points of hikes are already in place."
September 1, 2023: "Mortgages and Rising Interest Rates", a National Association of Realtors radio program and podcast hosted by Stephen Gasque featured HSH.com vice president Keith Gumbinger discussing choices and options for homebuyer in a climate of high fixed-rate mortgages.
September 1, 2023: "Housing Market Predictions: When Will Home Prices Be Affordable Again?", a Forbes review of challenging housing market conditions by Robin Rothstein featured analysis and forecasts by Keith Gumbinger, HSH.com's vice president:
How Will the Fed’s Interest Rate Decision Affect Mortgage Rates?
"Right now, it’s more about what the Fed intends to do rather than what it does," says Keith Gumbinger, vice president at mortgage website HSH.com. "[W]hile not meaningless, another quarter-point hike at this point won’t change the big picture much, as a lot of the ‘damage’ from higher interest rates is either done or is already in process."
Gumbinger also says that what matters most is what policymakers reveal about how long they plan to keep rates elevated and when rate cuts are in store.
For a housing recovery to occur, Gumbinger says several conditions must unfold.
"For the best possible outcome, we’d first need to see inventories of homes for sale turn considerably higher," Gumbinger says. "This additional inventory, in turn, would ease the upward pressure on home prices, leveling them off or perhaps helping them to settle back somewhat from peak or near-peak levels." And, of course, interest rates would need to cool off.
But Gumbinger says don’t hope they cool too quickly. Rapidly falling rates could create a surge of demand that wipes away any inventory gains, causing home prices to rebound.
"Better that rate reductions happen at a metered pace, incrementally improving buyer opportunities over a stretch of time, rather than all at once," Gumbinger says. He adds that mortgage rates returning to a more "normal" upper 4% to lower 5% range would also help the housing market, over time, return to 2014-2019 levels. Yet, Gumbinger predicts it could be a while before we return to those rates.
When Should I Buy a Home in 2023?
Gumbinger agrees that it’s hard to tell would-be homeowners to wait for better conditions.
"More often it seems the case that home prices generally keep rising, so the goalposts for amassing a down payment keep moving, and there’s no guarantee that tomorrow’s conditions will be all that much better in the aggregate than today’s."
August 23, 2023: "New homes entice buyers again while the rest of the housing market languishes", a Yahoo Finance look at divergent homebuying conditions by Gabriella Cruz-Martinez included a forward-looking observation by HSH.com VP Keith Gumbinger:
At the same time, builders have ramped up construction of new homes, meaning they'll be left with more supply they need to unload. The seasonally adjusted estimate of new homes for sale at the end of July was 437,000, the government reported, representing a 7.3-month supply at the current sales rate.
"As far as future demand goes, mortgage rates will continue to be a damper... but provided they stop rising, sales will likely edge up," Keith Gumbinger, a vice president at HSH.com, said. "There's not a lot of difference in monthly payment or qualifying between say, just under and just over 7%, but it could put pressure on existing-home sellers to be more flexible, and I'd expect that it will prompt builders to step up incentives to help to continue to move homes."
August 22, 2023: "Teachers are struggling to buy homes - here’s where to turn for help", a Yahoo Finance review of homebuying affordabilty challenges for educators by Rebecca Chen featured some advice from Keith Gumbinger, HSH.com's vice president:
However, buyers should be aware of the requirements associated with these perks. At Homes for Heros, buyers participate by working with the organization's real estate agents, lenders, and title and inspection specialists. The website stated that by working with each additional specialist, homebuyers can increase their qualified rebate amount.
Most private organizations have similar requirements, so it's crucial for buyers to carefully research each one to understand what it takes to be eligible.
"These kinds of things need to be researched and likely need to be set into motion in advance of the decision to purchase a home," Keith Gumbinger, vice president at HSH.com, said. "So a potential eligible homebuyer will likely need to conduct the research beforehand."
August 21, 2023: "Want To Buy A Typical Home? Better Have A Six-Figure Income", an Investopedia analysis of housing market conditions by Diccon Hyatt utilized HSH.com's original research and calculations as a basis for discussion:
Today’s soaring home prices and mortgage rates mean the typical household falls short of the income needed to buy the median-priced home by more than $20,000 a year.
That’s according to mortgage data company HSH, which estimated that as of the second quarter, a household would need to make $105,324 to afford a typical home.1 As of 2021, the median household income was only $70,784 according to the Census Bureau.2 Recent increases in the costs to buy a home have left income in the dust, as the chart below shows.
August 10, 2023: "Mortgage rates are now just shy of 7%,", a Yahoo Finance mortgage market update by Rebecca Chen included a quote from HSH.com vice president Keith Gumbinger:
For instance, 80% of US homeowners have a rate under 5%, with a third holding a rate under 3%, according to Zillow. Those with rates below 5% are almost half as likely to sell their home than those with rates above that threshold.
"If rates were to settle back to say the mid-4% range and prices were to settle back further from recent record highs, that combination might help promote better balance in the market, since the jump from property A to property B might be more manageable," Keith Gumbinger, vice president at HSH.com, a mortgage resource website, wrote to Yahoo Finance.
August 4, 2023: "Why You Should Apply for a HELOC Now, Before You Need One", a The Messenger look at home equity borrowing conditions by Kathleen Howley featured quotes from Keith Gumbinger, HSH.com's vice president:
All of that means home equity lending is poised to take off soon, especially given how many people are like Willis, said Keith Gumbinger, vice president of HSH.com, a website for mortgage tools and advice.
"Most people in that situation are going to eventually think of getting a HELOC, especially when rates go lower," Gumbinger said.
First, don’t confuse a HELOC with a lump-sum home equity loan that carries a fixed interest rate. Those aren’t a good option if rates are poised to fall or if you don’t know when and if you’ll need the money.
Second, consumers who shop around might be able to avoid an origination fee and an appraisal fee, Gumbinger said. Your questions should include: Is there an annual fee? Is there a non-usage fee? Will I get a discount on my rate if I have an account with the bank originating the loan?"You need to go out and shop the market," he said. "Make sure to read and understand the fine print because there is a lot of variety to HELOCs."
July 20, 2023: "Mortgage rates dropped, but lack of home inventory remains a concern", a Yahoo Finance review of curren mortgage rates by Gabriella Cruz-Martinez included a quip or two from Keith Gumbinger, vice president of HSH.com:
And if there’s any winner in today’s market, it’s homebuilders - as buyers that haven’t been priced out yet turn to new construction.
"New home construction and sales are benefiting from a lack of available and affordable inventory in the existing home market, exacerbated to some additional degree by homeowners unwilling to give up low-rate mortgages," Keith Gumbinger, vice president of HSH.com, told Yahoo Finance. "Selling and then hoping to buy another home exposes the seller-turned-buyer to both high home prices to be financed with much higher mortgage costs."
July 20, 2023: "4 Smart Steps To Take Before Buying Your First Home", a Kiplinger discussion of how to prepare to buy a home by Andrea Browne Taylor featured advice from HSH.com vice president Keith Gumbinger:
Experts often advise would-be buyers to plan on staying in a new home no fewer than five to seven years. "You’re going to spend thousands of dollars to get into the home. To get out of it is going to be equally expensive and may possibly cost more when you do it in less than five years or in a down market," says Keith Gumbinger, vice-president of HSH.com, a publisher of mortgage information and rates.
Many young would-be home buyers might find themselves with blemishes on their credit report, thanks to missed student loan or credit card payments. Lucky for me, I learned long before pursuing homeownership that such behavior comes back to haunt you in the form of a low credit score. I've changed my bad spending habits and boosted my score. If you check your credit report early, you'll have ample time to correct any issues. "What you don’t want is to have to address a bunch of mistakes on your credit report while actively looking for a home and trying to get approved for a mortgage loan," says Gumbinger.
July 19, 2023: "Housing starts: Construction numbers slip in June after a bullish May", a Yahoo Finance review of recent home construction trends by Gabriella Cruz-Martinez included some observations from Keith Gumbinger, HSH.com's VP:
While the latest builder confidence cautiously edged higher in July, rising interest rates and supply chain issues are threatening to make single-family residential construction "reach a bottom earlier this year," Dietz said.
According to Keith Gumbinger, vice president of HSH.com, an even more prevalent concern that could slow down construction are labor shortages - though hires appear to be ramping up as of late.
"From what I can discern, supply issues for goods and materials have been easing, and that probably should continue to normalize, although I would think that labor shortages may be more persistent, as has been the case for some time," Gumbinger told Yahoo Finance. "I would think that a more likely damper on new construction will be due to a mismatch between buyer demand and available developable lots in already built-out areas."
Only 22% of builders reported cutting prices in July, NAHB’s latest homebuilder confidence survey found, down from 25% in June and 27% in May. Builders have also been pulling back on the use of sales incentives, largely due to limited resale options in the market.
"Pulling back on incentives is to be expected with the improvement in demand for newly constructed homes," Gumbinger said. "Any retailer will tell you that with at least a fair number of customers coming in the door, there's less reason to need to run a sale to attract them."
"Should demand flag anew, it's reasonable to expect that sales incentives will return - at least to a level to get folks to start coming back in the door again," Gumbinger added.
July 7, 2023: "Americans are finally getting used to the bad homebuying conditions", a Yahoo Finance review of housing market conditions by Rebecca Chen included some historical context by HSH.com VP Keith Gumbinger:
The 2% to 3% mortgage rates homebuyers saw in the last decade were more the exception than the rule, and homebuyers are finally making peace with where borrowing costs are.
"I think it's a realization that those 3% or below mortgage rates were the product of extraordinary circumstances," Keith Gumbinger, vice president at HSH.com, a mortgage resource website, wrote to Yahoo Finance. "The first episode was the all-out response to the Great Recession, and the latest was the even more all-out Fed response to the pandemic outbreak."
June 15, 2023: "Could More Bank Failures Trigger A Housing Market Crash?", a Forbes Advisor evaluation of the effects of recent banking stresses by Robin Rothstein featured some brief analysis by Keith Gumbinger, HSH.com's vice president:
If More Banks Fail, Should We Brace for a Housing Market Crash?
Keith Gumbinger, vice president at mortgage website HSH.com, agrees that more regional bank failures are unlikely to lead to a housing market crash. Although, he suggests that the reverse scenario could be possible.
"[H]ousing markets stumble, asset values held by banks decline, and this, in turn, could be a contributing factor in a bank failure," Gumbinger says.
How Fewer Regional Banks Could Impact Mortgage Rates
Though the chances of regional bank failures causing a housing market crash are low, fewer banks could lead to higher mortgage rates since there would be less competition, Gumbinger says.
Additionally, more regional bank failures could make it harder for people to access the types of mortgages they need, especially those living in smaller towns and rural areas.
"Taken to the extreme, where a single lender may be ‘the only game in town’ in a given market, it’s possible that a bank’s decision to not offer certain kinds of loans (or exit residential lending altogether) could leave some communities with few options," Gumbinger says.
June 15, 2023: "Housing: It got a tiny bit cheaper to buy a home this week", a Yahoo Finance housing update by Gabriella Cruz-Martinez included some context from HSH.com vice president Keith Gumbinger:
While high rates and limited listings are a deterrent from some buyers, opportunistic ones still in the market are ready to jump when rates dip or inventory becomes available in a supply-starved market.
"Affordability and inventory are still an issue. And when they do find something to buy, it's very expensive and financed with fairly high interest rates," Keith Gumbinger, vice president of HSH.com, told Yahoo Finance. "All part of the Fed’s plan to help slow the economy ultimately, but that doesn’t mean it's going to make for much by way of a robust housing market."
What the Fed decision means for mortgage rates
This week, the Federal Reserve left its benchmark interest rate at the target range of 5% to 5.25%, marking the central bank’s first pause after 15 months of relentless increases to shunt inflation. The pause could finally give homebuyers a chance to catch their breath.
"I believe that the recent run-up in mortgage rates was due to the unwinding of some positions set in anticipation of the Fed trimming rates later this year in favor of a steady-to-higher expectation," Gumbinger said, "coupled with the expectation of a slew of new Treasury issuance hitting the market again."
That means rates shouldn’t increase much more unless something significant happens in the economy, Gumbinger said.
June 14, 2023: "It hasn’t been this hard for homebuyers to get a mortgage since 2013", a Yahoo Finance review of housing market conditions by Gabriella Cruz-Martinez included a few brief quotes from HSH.com VP Keith Gumbinger:
Home prices have ticked back up this spring, after softening since mid-2022, and mortgage rates remain near 7%, crushing affordability.
For instance, the monthly mortgage payment on the median asking price hit a record high of $2,651 when rates reached 6.79% earlier this month, according to Redfin. That’s up 14%, or $320 per month, from a year ago.
"Affordability is a real challenge," Keith Gumbinger, vice president of HSH.com, told Yahoo Finance.
New listings of homes for sale fell 25% year over year to their lowest level on record in the four weeks leading to June 4. That kept the total share of homes on the market down 5% from a year prior during that period, according to Redfin.
"Those with affordability issues can try and offer a larger down payment. There are ways to manipulate your way through and at least preserve your opportunity to participate in this market," Gumbinger said. "But it doesn’t matter if there’s nothing to buy."
June 6, 2023: "You Can Now Buy a Home With Just 1% Down", a Realtor.com look at new mortgage offers in the market by Clare Trapasso included some comments from HSH.com VP Keith Gumbinger:
Another concern is that, as the housing markets corrects and prices drop in many parts of the country, homebuyers who use small down payments could find themselves underwater on their loans.
But that’s not necessarily a problem in this era of accelerated housing cycles.
"They still have a place to live, [and] prices generally recover over time," says Keith Gumbinger, a vice president at HSH.com, a mortgage information website.
The lender absorbs more of the risk than the borrower, says Gumbinger. If the borrower can’t pay the mortgage, then the lender doesn’t get paid until the home is ultimately sold.
Plus, these loans don’t balloon in size over time or adjust as mortgage rates change. Both are 30-year, fixed-rate mortgages offering steady, monthly payments.
"These borrowers are at least reasonably qualified," says Gumbinger.
June 4, 2023: "Pay Cash or Extend the Loan Term? 40-Year Loans Already Exist", a Banker & Tradesman "The Housing Scene" syndicated column by Lew Sichelman featured a few quips from Keith Gumbinger, HSH.com's vice president:
Spoiler alert: They already are, but they are not plentiful.
"A 40-year is a pretty rare offering at the moment," Keith Gumbinger of HSH.com, a mortgage information website, told me.
The reason: a "super-small audience and likely zero secondary market”" where lenders can offload their products to investors.
Gumbinger pointed to a few mortgage companies and credit unions that write some form of 40-year loan - mostly either adjustable-rate mortgages, in which the interest rate changes every so often, or interest-only loans.
Of course, few people actually hold their mortgages for the full term. They either refinance or sell. So, it’s more likely that those who opt for a 40-year loan will jettison it long before the final payment is due.
Gumbinger agrees that "a refinance at some point is a virtual guarantee," and advises anyone considering a 40-year mortgage to make sure there is no penalty for paying the loan off early. And if there is, make sure you know exactly what it will be.
May 18, 2023: "Mortgage rates edge higher, further adding to housing's challenges", a Yahoo Finance look at still-challenging housing market conditions by Gabriella Cruz-Martinez included some context from Keith Gumbinger, HSH.com's VP:
Elevated rates and home prices continue to crush affordability for many homebuyers, while rate-trapped homeowners are forgoing listing their homes for sale - worsening an inventory-strained market.
"Affordability and inventory is still an issue," Keith Gumbinger, vice president of HSH.com, told Yahoo Finance. "There’s not a lot of houses to buy so even where there is demand, it’s really hard for sales to pick up based upon nothing to buy. If you do find something to buy, it’s still very expensive and financed at fairly high rates."
For instance, real estate analytics firm Altos Research found that the median price of a single-family home was $449,913 for the week ending May 15, unchanged from last week, but up from $445,000 the week ending May 1.
"Affordability is a tremendous issue over the last couple of years largely related to interest rates, but also to the significant increases in home prices," Gumbinger said. "It’s become much more of a challenge."
May 16, 2023: "Will The Housing Market Crash in 2023? Experts Give 5-Year Predictions", a Forbes Advisor long-range outlook for housing and mortgage markets by Natalie Campisi and Robin Rothstein included a forecast from Keith Gumbinger, HSH.com's VP:
But what about people who bought a home during or before the pandemic who are now seeing their home values decline?
Keith Gumbinger, vice president of mortgage website HSH.com, says if you bought a home for $300,000 three years ago, you could have sold it for $500,000 last year but now can only command $400,000. Still, he’s hesitant to characterize this as a "bubble pop" or a "crash."
"It is a ‘paper loss,’ but not an actual loss," Gumbinger says.
On the other hand, what if you’re not ready to buy a home right now? Is there anything you should be doing to prepare for when you are ready to get back onto the house-hunting trail?
"Bulk up your savings, build your credit strength and research towns and neighborhoods which may suit your needs," Gumbinger says.
May 11, 2023: "Mortgage rates decline for the second week in a row", a Yahoo Finance look at the headwinds facing potential homebuyers by Gabriella Cruz-Martinez featured some comments from HSH.com vice president Keith Gumbinger:
Though some prospective homebuyers capitalized on the dip this week, many remain highly sensitive to affordability pressures as home prices rise this spring. Meanwhile, sellers are notably less active this spring, further deteriorating the inventory shortage.
"Things are pretty sluggish right now, but you would expect that given the kind of conditions we’ve been experiencing," Keith Gumbinger, vice president of HSH.com, told Yahoo Finance. "Mortgage rates are still pretty high, we’re not at that 7% mark at the moment, but high enough. Of course, affordability and inventory remain an issue."
First, the recent banking turmoil has led some lenders to tighten standards - particularly on jumbo loans for purchases of higher-priced homes. Second, continued elevated mortgage rates have kept many entry-level buyers on the sidelines. The third and most problematic reason is a dearth of homes for sale.
"Inventory is a key problem," Gumbinger said. "Borrowers can adapt to higher interest rates and they do over time, we’ve seen it. But if there’s nothing to buy, it doesn’t matter how well you align with the market conditions because there’s nothing inside the store, there’s nothing on the shelf."
The lack of available inventory along with rising demand has also caused home prices to rise, reversing an easing trend from the winter.
"For buyers, affordability became a tremendous issue over the last couple of years largely due to the change in interest rates, but also related to significant increases in home prices." Gumbinger said. "It’s become much more of a challenge now that there aren’t enough houses to meet the demand that’s out there."
May 7, 2023: "Millennial Homeowners: Time to Tap Your Equity?" a syndicated Smart Moves column by Ellen James Martin that featured some advice from HSH.com VP Keith Gumbinger:
"Owners don’t want to disturb that low-rate primary mortgage they have," he says.
Here are a few pointers for HELOC borrowers:
-- Research the HELOC market.
"It’s best to think through what you want before you shop around for the best type of home loan for your needs," says Keith Gumbinger, a vice president at HSH Associates, which tracks mortgage markets throughout the United States.
As a first step, buyers can inform themselves through online resources. For instance, Gumbinger suggests that mortgage shoppers seek home loan information through his firm’s website: hsh.com.
How do you find an empathic lender?
Gumbinger says real estate agents are often a good source for names. But he advises you to look beyond their suggestions.
"If you reach out in your neighborhood, you’ll probably find someone down the street who’s bought a house or refinanced lately. You can also canvass friends and family," he says.
As Gumbinger says, you may want to begin the rate-shopping process with the lender who tutored you on the basics. But he urges you to extend your search beyond the first lender.
"The more the merrier when it comes to rate quotes. But always remember you’re looking for competent service along with low rates," Gumbinger says
May 7, 2023: "The benefits of homeownership", a National Association of Realtors radio program and podcast hosted by Stephen Gasque featured HSH.com vice president Keith Gumbinger clarifying a widely-held misperception about home ownership.
April 21, 2023: "What to know about getting a mortgage in 2023", a National Association of Realtors radio program and podcast hosted by Stephen Gasque had HSH.com vice president Keith Gumbinger as a featured guest discussing the ins and outs of a tricky and changing 2023 mortgage market.
April 10, 2023: "Cash In on Your Home Equity", a Kiplinger look at using your home equity wisely by Emma Patch included some expertise from HSH.com VP Keith Gumbinger:
Home improvements are a less-controversial reason to apply for a HELOC. A project that enhances your home’s value is one of the most common and arguably one of the best uses of the equity in your home, says Keith Gumbinger, vice president of financial publisher HSH (opens in new tab). And if you itemize deductions on your tax return, the interest you pay on home equity that is used to buy, build or improve your primary residence or qualified second residence may be tax-deductible.
There is a workaround for homeowners who have already opened a HELOC but would rather have a fixed rate. "Many lenders allow you to open a home equity line of credit and then break off a piece of that line of credit into a fixed-rate, lump-sum repayment opportunity," Gumbinger says. For example, a homeowner who sets up a line of credit for $25,000 and borrows $10,000 of it might break that balance off into a 10-year repayment period with a fixed rate.
Ultimately, tapping home equity makes more sense in some situations than others, and whether it’s the best tool can depend a lot on how high interest rates are or how strong the real estate market is. "Cautious use of your home equity is always a good idea, particularly right now when home values are less certain to continue increasing," says Gumbinger.
This article also appeared on NASDAQ.com
April 10, 2023: "Tap Your Home's Equity for Retirement Income", a Kiplinger discussion of using your home equity to support your retirement by Rivan V. Stinson included some quotes and context from Keith Gumbinger, HSH.com's vice president:
<"If you run into periods when the market’s not returning what you hoped, a HELOC could tide you over so that you’re not selling your investments at a bad time," says Keith Gumbinger, vice president of financial publisher HSH (opens in new tab). "It’s kind of a temporary subsidy." But temporary is the key word here -- eventually, you won’t be able to withdraw any more from your line of credit and will have to start paying it back.
[On HECMs] Before you take out a reverse mortgage or any other product that taps your home equity, talk it over with your family, says Gumbinger. "No one wants to talk about their finances, but you are thinking about making changes that could affect your spouse or your kids in the future -- especially in the case of taking out a reverse mortgage," he says. If you have a financial adviser, set up a session to discuss the pros and cons before signing on the dotted line.
April 6, 2023: "Mortgage rates fall again, but other obstacles remain for homebuyers", a Yahoo Finance look at housing market conditions by Rebecca Chen featured some context from Keith Gumbinger, HSH.com's vice president:
Despite the lower rates, buyers aren’t buying - or can’t buy.
"It's buyers at the fringes of affordability that are affected the most," Keith Gumbinger, vice president of mortgage website HSH.com, told Yahoo Finance. "A borrower may be able to qualify for enough mortgage to participate in her local market when rates are 4.5% or even 5%, but will likely be shut out of it at 6%."
A big part of the inventory problem is that homeowners who would normally sell are holding off because of rates. According to Redfin, 85% of homeowners had a rate below 6% as of September 2022.
"Just as buyers buy for a reason, sellers also sell for a reason," Gumbinger said. "Certainly, a homeowner would likely be less willing to give up a record-low rate for a mortgage if they are making a lateral move or moving up, so this may give folks some pause."
March 29, 2023: "Is the U.S. Tipping Into a Recession? The Answer Will Determine the Direction of the Housing Market", a Realtor.com review of early spring housing markets by Clare Trapasso included some economic commentary from HSH.com VP Keith Gumbinger:
Homebuyers have tenuously returned to the market this spring, as homes prices dipped in certain parts of the country and mortgage interest rates ticked down a little from a high of more than 7% last year. Yet the bank failures and the number of layoffs ratcheting across industries could cause nervous buyers (and sellers) to retreat to the sidelines, plunging the housing market back into a freeze.
"The path for a soft landing has narrowed even further because of the recent banking situation," says Keith Gumbinger, a vice president at HSH.com, a mortgage information website. "We don’t know the final repercussions; we don’t even know if the whole thing has unfolded yet. That’s certainly going to be something of concern."
Many of the layoffs have been concentrated in the tech industry, which most economists believe over-hired during the pandemic."The employment market is millions of jobs," says Gumbinger, of HSH.com. "While we do see some high-profile layoffs, we haven’t seen the widespread job losses which would necessarily be a precursor to a downturn."
March 24, 2023: "The 10 Years Before Retirement Are Critical. How to Be Ready", a Barron's look at preparing your finances for retirement by Elizabeth O'Brien included some information and a caution regarding HELOCs from Keith Gumbinger, HSH.com's vice president:
Total costs to open a HELOC will probably run you less than $1,000, says Keith Gumbinger, vice president at HSH.com, a publisher of mortgage and consumer loan information. Interest rates on Helocs are typically two percentage points over the prime rate, or the interest rate that banks use to set their loan rates, he says. The prime rate is currently at 8%.
An important caveat for HELOCs, says Gumbinger, is that banks can withdraw them if your financial situation deteriorates to the point where it affects your credit.
March 23, 2023: "Mortgage rates drop after volatile two weeks", a Yahoo Finance look at mortgage rate trends by Gabriella Cruz-Martinez included a quip from Keith Gumbinger, HSH.com's vice president:
For instance, the buyer of a median-priced home with a 6.65% rate - near last week's rate - would face a monthly payment that’s 49% higher than last year, according to Realtor.com.
"Affordability remains an issue, and will as long as home prices remain as supported as they have been - softening of late, but still above already-pricey year ago levels," Keith Gumbinger, vice president of HSH.com, told Yahoo Finance. "Mortgage rates remain as elevated as they have been."
March 22, 2023: "The Fed Just Raised Interest Rates Again - Here’s Why That’s Bad News for Both Homebuyers and Sellers", a Realtor.com review of housing conditions by Clare Trapasso included a market outlook from HSH.com VP Keith Gumbinger:
Sales of existing homes also surged, rising 14.5% in February from January. Some of this was seasonal; sales are generally slow in the dead of winter following the holidays, and pick up in the spring when buyers generally come out in full force. Annually, sales were down 22.4% from a year ago.
"We are probably going see a pick up in sales as folks go out and look at homes, absent more banking crises and absent rates skyrocketing," says Keith Gumbinger, a vice president at HSH.com, a mortgage information website.
He believes prices could even rise a little this spring as the competition for homes heats up.
"[But] I don’t think we’re going to be competitive with last year’s numbers," he says.
March 21, 2023: "Housing expert on mortgage rates: 'Plan on rate volatility' ahead of Fed", a Yahoo Finance look at restive markets by Gabriella Cruz-Martinez included some context and observations from HSH.com vice president Keith Gumbinger:
While the Fed’s decision on Wednesday may have some sway on rates in the short term, pervasive affordability constraints will continue to put pressure on the housing market while inflation lasts, Keith Gumbinger, vice president of HSH.com, told Yahoo Finance.
"What the Fed may or may not do does have some effect, but quarter-point, half-point or no point at all, mortgage rates will remain closer to cycle highs than not," Gumbinger said. "as long as inflation continues to be an issue, as long as labor markets remain tight and throwing off wage increases the Fed feels are inconsistent with 2% core personal consumption inflation, and as long as the economy continues to perform at a pretty solid clip."
March 19, 2023: "The 2023 Spring Real Estate Market", a National Association of Realtors radio program and podcast hosted by Stephen Gasque included Keith Gumbinger, HSH.com's VP as a featured guest discussing what higher interest rates for home mortgages mean for homebuyers and where we can expect rates to go this spring.
March 19, 2023: "If you want to save on your mortgage, worry less about the APR and more about the fees", a CNBC discussion by Jason Stauffer of a technical and poorly-understood facet of mortgage lending included a quote from Keith Gumbinger, HSH.com's VP:
A mortgage APR is based on the interest rate and lender fees. It’s almost always higher than the interest rate because it’s meant to show the total borrowing cost. If you keep your mortgage for its full term, which is typically 30 years, then the APR listed on your Closing Disclosure is what you end up paying.However, if you refinance your mortgage or sell your home before 30 years, "the actual APR would be different ... since any fees you paid would effectively be broken down over a shorter period of time," says Keith Gumbinger, vice president at HSH, a mortgage industry publication.
March 13, 2023: "Housing market could see relief from shock move in Treasury market after SVB collapse", a Yahoo Finance mortgage market bulletin by Gabriella Cruz-Martinez included some expert context from Keith Gumbinger, HSH.com's vice president:
Mortgage rates tumbled Monday in the wake of Silicon Valley Bank’s collapse that has rattled markets.
But the latest decline still might not be enough to convince some homebuyers to come back into the market given lingering affordability concerns, Keith Gumbinger, vice president of HSH.com, said. For instance, two weeks ago when rates were at 6.65% - a bit higher than now - a buyer of a median-priced home still faced a monthly mortgage payment that was 49% higher than a year ago, Realtor.com data showed.
"Any decline in rates likely only partially erases the measurable increases of the past few weeks," Gumbinger told Yahoo Finance. "It's helpful to those in or nearly in the market, but the overall picture still isn't all that bright rate-wise."
Further drops, though, could spark some activity. For instance, when rates started to fall at the start of the year, almost dipping below 6% at the beginning of February, mortgage applications for purchases and refinances perked up.
"[That] did attract some folks, but it took weeks of lower rates to attract consumers and create even a modest increase in activity," Gumbinger said.
But if the decline in rates is short-lived, don’t expect it to move the housing market much.
"Consumers that aren't in the market already - or who aren't highly prepared to act - can't easily take advantage of a sharp decline in rates," Gumbinger said. "To be most beneficial, rates need to decline and hold there for a time, so potential homebuyers and homeowners have the opportunity to react."
Even predicting where mortgage rates end today isn’t easy, Gumbinger said. "Rates were a little lower on Friday than Thursday, and lower today than Friday, and we're probably a quarter-point or perhaps a bit more lower now than those days right now - but the day's not over yet," he said. "Anything can happen."
March 2, 2023: "Mortgage Rates Are Closing In on 7% Again. What Could Help Push Them Lower", a Barron's discussion of changing mortgage conditions by Shaina Mishkin included some analysis by HSH VP Keith Gumbinger:
While Freddie’s gauge fell shy of 7%, recent daily rates measured by other publishers have approached - or already surpassed - 7%. Rocket Mortgage, a large home loan originator, quoted 30-year fixed rates at 7.25% Wednesday afternoon, while Mortgage News Daily’s survey pegged the 30-year fixed rate at 6.94%.
"Regardless of your preferred gauge, rates are closing in on the 7% mark again," says Keith Gumbinger, the vice president of mortgage website HSH.com, via email. Mortgage rates measured by Freddie Mac in 2022 peaked at 7.08% in October and November. "No matter the source, all signs point to higher rates this week than last, and we’ll likely be closer to those previous cycle highs than not this week," said Gumbinger.
Like the last time rates approached 7%, mortgage application activity measured by the Mortgage Bankers Association has pulled back. Unlike the last time, the headwind comes at the start of the typically-busy spring home buying season.
"This was already shaping up to be a pretty challenging spring season, but lower interest rates in December and January did lend a little hope that activity would pick up," Gumbinger said. "The recent flare in mortgage rates will likely put some encouraged buyers back on the fence."
In the meantime, indicators that inflation is softening and the labor market is cooling could help bring mortgage rates lower, says HSH’s Gumbinger - but signs of a resilient labor market or sticky inflation could send them higher. "Too-high inflation, too-tight labor markets or too much economic strength puts the Fed ‘in play’ for more rate hikes and for rates to remain higher for longer," Gumbinger says.
Higher mortgage rates will increase housing costs for potential buyers financing their home purchase - but it isn’t all bad news, Gumbinger says. "Potential borrowers in the market may have a bit more to choose from, face less competition and have more time to make a considered decision about their purchase," he says. "It remains a ‘seller’s market,’ but somewhat less so than in 2021 and 2022."
March 1, 2023: "New stock-as-collateral mortgage for Amazon workers comes with key caveats", a Yahoo Finance look at a novel mortgage perk by Gabriella Cruz-Martinez included a review of the product from HSH.com vice president Keith Gumbinger:
"Pledged-asset mortgages aren't unheard of and appear in the market from time to time," Keith Gumbinger, vice president of HSH.com, told Yahoo Money. "As you might expect, these sorts of arrangements are more common in wealth management or private banking environments. That this is limited to Amazon stock and Amazon employees does make it rather limited in scope, more like an employee benefit offer."
Since the mortgage requires a 20% down payment, borrowers must pledge stock that is worth 40% of the home’s purchase price if they plan to use only stock for the down payment. Better does allow a mix of cash and pledged stock for the down payment.
"That low valuation provides Better with a great bit of protection," Gumbinger said. "The value of the pledged Amazon stock could theoretically drop 50% and there would still be a 20% down payment/equity stake if the homeowner defaulted and the property was foreclosed upon."
But that is a lot of stock to come up with.
"So you may have to lock up a lot of shares to cover a 20% down payment," Gumbinger said. "Whether that's good or bad, it’s hard to say, personal finance being, well, you know, personal."
"That the homeowner can't liquidate the stock without selling the home or refinancing could mean missing out on a chance to convert holdings into cash as needed," Gumbinger said, "or potentially missing the chance to sell shares at maximum value."
February 23, 2023: "Mortgage rates surge closer to 7%", a Yahoo Finance mortgage market update by Gabriella Cruz-Martinez include some context from Keith Gumbinger, HSH.com's vice president:
The sharp uptick in rates has squeezed homebuyer demand, driving inflation-weary homebuyers to lower their budgets or abandon their purchasing plans. Meanwhile, the handful of buyers still in the market are negotiating sales before rates further erode their buying power.
"Still-high home prices and elevated rates have crushed affordability," Keith Gumbinger, vice president of HSH.com told Yahoo Finance. "That said, there is reasonable demand and ability by potential homebuyers to engage in the market, but there are still too few homes for sale from which to hope to find something suitable at a price a prospective buyer can actually afford. All combined, these things are dampening the market."
February 16, 2023: "Mortgage rates jump higher after nearing 6%", a Yahoo Finance review of the effects of a sharp change in mortgage rates by Gabriella Cruz-Martinez included some quotes and context from Keith Gumbinger, HSH.com's vice president:
But the recent spike eroded some of the newfound purchasing power buyers gained recently, dampening spirits. The small window for refinancing has also shut for many homeowners.
"In terms of home buying, elevated rates certainly are a deterrent for potential homebuyers," Keith Gumbinger, vice president of HSH.com, told Yahoo Finance. "Still-high home prices combined with relatively high mortgage rates have crushed affordability."
"Our latest analysis shows the income needed to buy a median-priced existing home in the fourth quarter of 2022 was about 48% higher than that which was needed in the fourth quarter of 2021," Gumbinger said. "That's not something that's easily overcome when incomes are only rising about 5% per year or so."
"Mortgage rates are shifting higher already. There's been enough economic data of late to suggest that the economy is still running pretty strong and inflation isn't fading as quickly as hoped," Gumbinger said, adding that he expects mortgage rates to increase around a quarter-point from the 6.09% registered earlier this month as a result.
January 27, 2023: "Why it’s cheaper to rent than buy in many markets", a CNBC look at purchase and rental housing market conditions by Kate Dore included a quip or two from Keith Gumbinger, HSH.com's vice president:
While conditions for homebuyers may be somewhat more favorable in 2023, it’s difficult to predict whether the economy is heading for a recession, which may shift financial priorities, experts say.
"One thing to always keep in mind is that markets are constantly changing," said Keith Gumbinger, vice president of mortgage website HSH. "If you don’t need to be in this marketplace right now, you’re probably better to hold off and watch conditions change."
Of course, there’s more to home-buying decisions than home prices and mortgage interest rates. "The decision on whether to rent or buy is always a matter of timing," he said. "And more importantly, it’s a matter of need."
January 13, 2023: "Buying a Home in 2023" a National Association of Realtors radio program and podcast hosted by Stephen Gasque included Keith Gumbinger, HSH.com's VP as a featured guest, where he discussed mortgage options, conditions and strategies for financing a home this year.
January 6, 2023: "Housing market: More and more home sellers dangle incentives to get buyers, study finds", a Yahoo Finance review of home selling conditions by Gabriella Cruz-Martinez featued a few quotes from Keith Gumbinger, HSH.com's vice president:
Overall, concessions were most commonly offered to buyers in San Diego with 73% of sellers giving at least one buyer incentive, followed by Phoenix (62.9%), Portland, OR (61.6%) Las Vegas (61.3%), and Denver (58.45%).
"There’s an opportunistic type of buying for some borrowers out there, homebuyer interest should continue to pick up the closer we get to the spring," Keith Gumbinger, vice president of HSH.com, told Yahoo Finance. "We’ll see if mortgage rate levels change or prices soften. One thing’s for sure - homebuyers are adaptable."
According to Danielle Hale, chief economist for Realtor.com, the share of buyer concessions has been "growing since late summer 2022," around the time the home prices peaked. Since then, home sellers have either had to adjust their pricing expectations or offer incentives to close a deal.
Gumbinger noted that housing market activity may pick up in spring, but economic headwinds will likely push builders to offer "price concessions... to support new construction in 2023."
January 5, 2023: "Mortgage rates tick up as the year kicks off", a Yahoo Finance look at mortgage markets at the beginning of 2023 by Gabriella Cruz-Martinez featured some commentary from HSH.com VP Keith Gumbinger:
Even if rates come down following a recession this year, it's unlikely that will ease buyer budgets.
"If things economically fall off a cliff at some point and mortgage rates fall a little more say nearing 5.5%, that’s not really all that cheap relative to what most potential homebuyers expect," Keith Gumbinger, vice president of HSH.com, told Yahoo Finance. And "if you’re looking for a lateral move, or a bigger house, you’re facing both higher interest rates and still-high home prices."
For buyers still in the market, the triple whammy of inflation, climbing interest rates and home prices registered over the past year have been an obstacle many have yet to recover from, experts say.
"We had record low mortgage rates just a little over a year ago," Gumbinger said. "For most potential homebuyers today, the 7% run we saw at the end of last year is the first time they’ve ever seen rates that high."
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