Rate hikes stop for the first time in 15 months. What’s that mean for mortgage rates?

Here’s what you need to know ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ [Better] [Better]( This week’s mortgage rates [Better]( Source: US average mortgage rates from [FreddieMac]( --------------------------------------------------------------- Better Mortgage Interested in today's rates? [See Better Mortgage rates]( --------------------------------------------------------------- #FundFact While many think today’s mortgage rates are sky-high, 30-year fixed mortgage rates actually [hit their peak at 18.63%]( way back in October 1981. In the news Mortgage rates fall as Fed pauses rate hikes for the first time in 15 months Mortgage rates fall as Fed pauses rate hikes for the first time in 15 months On June 15th, the Federal Home Loan Mortgage Corporation (Freddie Mac) [reported]( an average rate of 6.69% on a 30-year mortgage loan. That means the average mortgage rate dropped two basis points in comparison to the week before when the average rate came in at 6.71% This decrease comes after the Federal Reserve’s (aka “the Fed’s”) decision to pause rate hikes for the first time in 15 months—after 10 consecutive increases! There are several factors that impact the direction of mortgage rates; including the general health of the economy, inflation, bond market impacts, and the Fed’s monetary policy. So, who is the Fed and what does their impact on mortgage rates look like? The Federal Reserve is the nation’s central bank, composed of 12 regional banks and led by a board of governors. While the Fed doesn’t directly dictate mortgage rates, it definitely has a big influence. Within the Fed sits the Federal Open Market Committee (FOMC), who is responsible for establishing the Fed’s monetary policy. The goal of this monetary policy is to help stabilize the growth of the economy. While navigating a volatile market with rising inflation, the Fed will increase the benchmark federal fund rate to help decrease the demand for goods and services, which eventually trickles down to mortgage rates and the housing market. This is done in order to tame inflation and it seems to be working! The [inflation rate]( was at 9.1% in June 2022 and has slowly crept down to 4% as of last month. The Fed’s decision to pause rate hikes doesn’t mean we should expect to see an immediate drop in rates. While the Fed holds on rate hikes, mortgage rates may still fluctuate based on inflation and the economy’s response. On the bright side, [Freddie Mac’s Chief Economist, Sam Khater, predicts]( that mortgage rates could decrease later this year as (hopefully!) inflation continues to decline. In fact, [Fannie Mae’s most recent housing forecast]( predicts that rates could drop to 6% by the end of this year! While homebuyers may feel inclined to try to wait it out on high mortgage rates, it’s always a risk to try to time the market. If you’re an aspiring homebuyer that feels discouraged by rates, there may be a silver lining in looking at the bigger picture; when rates are high, it usually means you’ll have less competition when submitting an offer. When mortgage rates begin to decline, you can expect there to be an uptick in competition and home prices. No one can say when rates will decrease, or how much they’ll decrease by, but homebuyers shouldn’t completely ditch their homeownership goals. Homebuyers that plan on living in their home long-term may want to consider securing a home that fits their needs and [refinancing]( into a lower rate later down the line when the time is right. --------------------------------------------------------------- Better Mortgage Want to see your own personalized rates? [Get pre-approved in minutes]( --------------------------------------------------------------- HELOCs on the rise! HELOCs on the rise! Did you know that [nearly half of the homeowners]( that have a mortgage are in “equity-rich” territory? Meaning, their outstanding mortgage balance is only half or less than their home value. It’s no wonder that in 2022, the US saw HELOC originations [increase 41% year over year]( it one of the largest increases in over 10 years! As the value of homes grew across the nation during the pandemic, so did homebuyers equity. And while there are alternative ways to tap into the equity you’ve built in your home, like a [cash-out refinance]( homeowners may be drawn to HELOCs because their primary mortgage will remain untouched. That means homeowners that snagged a historically low rate during the refi-boom can tap into their equity and keep their low rate. If you’re interested in making renovations to your home, wanting to consolidate existing debt or just looking for a source of emergency funds, consider taking advantage of the home equity you’re sitting on. --------------------------------------------------------------- Better Mortgage Close on a Better HELOC in as little as 3 days¹ [Apply today]( --------------------------------------------------------------- Press Play Follow us on social to stay up to date with the latest mortgage tech, tips, and tools: Watch on [TikTok]( • [Instagram]( • [Facebook]( • [YouTube]( Quiz What of the following mortgage products is not a type of government-backed loan? - Non-conventional mortgage - Conventional mortgage - FHA mortgage - USDA mortgage [Better] [Better] [social]( [social]( [social]( [social]( [social]( ¹Assumes borrowers are eligible for AVM to calculate their home value, their loan amount is less than $250,000, and all required documents are uploaded to their Better Mortgage online account within 24 hours of application. 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