Navigating a Hot Homebuying Market Amid Rising Rates

Spring and summer are typically strong periods for home sales, and this season may be more competitive than ever. Recently, the National Association of Realtors (NAR) reported an average of four offers for every home sold – with residential properties selling in record time (typically within 20 days nationally). As home demand continues to outpace new listings, prospective homebuyers now face an added dynamic: rising interest rates.

From the long-term view, current mortgage rates are still competitive versus historic averages; however, the cost of waiting to buy or refinance your home or secure a home equity loan when interest rates are rising can be substantial.

To help navigate today’s complex mortgage environment, we encourage all homebuyers to do their homework and consult with an experienced lending professional.

Here are some things to consider based on recent trends:

The Time is Now

Mortgage rates have risen at their fastest pace in more than 35 years over the last 90 days. Interest rates can be impacted by many things. A big cause in the current uptick is the Federal Reserve’s monetary policy response to counteract inflation.

Homeowners and buyers should act quickly to lock in at today’s rates, as the cost of waiting could be considerable should rates continue to rise. Consumers should also be clued in on the many options they have for home financing. There is no “one size fits all” solution. In fact, CCM has an extensive portfolio of mortgage solutions, so there is one for every borrower’s lifestyle and personal situation.

Cash Offers Without Cash in the Bank

In today’s competitive housing marketing, cash offers are winning the day, but not everyone has disposable income. To address this gap in the market and help homebuyers compete more effectively, CCM recently introduced a CashPlus program in select states to enable qualified buyers to make a full-cash offer to a seller, pending an inspection. During closing, the buyer pays a fee between 1% and 3.25% for this convenience depending on the solution they leverage under this program. Fees vary based on state and program type. 

CCM’s CashPlus program is currently available on primary residence mortgages in Alabama, Florida, Georgia, Indiana, Ohio, Oklahoma, Missouri, North Carolina, South Carolina, Tennessee, Texas, and Virginia. More states in the Midwest and the West Coast will be added soon.

Staying Put and Sprucing Up

With limited home inventory and rates on the rise, some homeowners are electing to invest in their existing homes instead of buying new ones. A variety of tools and financing options are available for home renovation projects to fix up your nest. CCM’s loan originators are happy to break those down based on your individual circumstances.

Say Goodbye to Escalating Rents

Nationwide, the rent for a one-bedroom apartment rose an average of 12% last year. Those trends are continuing and, in some areas of the country, rents have risen as high as 40% from a year ago. When feasible, buying a home is the best way to avoid escalating rents and lock in monthly housing expenses. A knowledgeable loan officer can help ease the stress of shopping for a new home. They can help you lock in today’s rates, get pre-approved for a loan, or explore the range of specialty purchase programs that best fit your needs. You can also check out CCM’s tools to help you evaluate the merits of buying versus renting a home.

For more information on how you can lock in today’s rates, connect with one of CCM’s experienced loan officers in your local community.