00:00 Josh
So you report mortgage rates, now at their highest level in more than a year. What what happened, Claire? Start there. Why are rates moving higher again?
00:08 Clare
Yeah, Josh. So what we’re seeing this week is really as a result of what Fed Chair Warsh said last Friday when he gave a speech at Jackson Hall. And for the first time, he really emphasized that the Fed was worried about inflation.
00:20 Clare
The bond market was definitely taking that to mean that we are going to see a rate hike soon, and mortgage rates and bond yields are really closely correlated. So when bond yields moved higher, so did mortgage rates, unfortunately.
00:32 Josh
The average 30-year fixed, you point out it Claire, so we’re back at uh 671. How how significant is that level, Claire? Is that is that going to noticeably change the calculus of someone who was thinking about buying?
00:46 Clare
I don’t think it will because what we’ve seen this year is rates have crept up, you know, relatively slowly from about 6% to 6.7%. You know, that’s definitely bad news, but it’s not like back in 2022 when in a single year, we saw rates go from 3 and a half% to 7%.
01:05 Clare
That kind of really big jump, I think scares more people than these little incremental moves higher. But, you know, that being said, we don’t want to see higher rates in this market. That does tend to slow things down a little bit.
01:13 Josh
For somebody Claire, maybe they’re listening right now, and and for different reasons they feel like, you know, they need to buy right now. Is there any ways, Claire, just common sense ways they can think about trying to sort of soften the blow?
01:24 Clare
Definitely. So you can often save a little bit if you’re willing to shop around for lenders, lenders will compete for your business and try to give you a lower rate. You know, some people are just trying to lower their payment if they can afford to put a little bit more down, that will lower your payments. And one other thing that’s kind of coming back in vogue now is these adjustable rate mortgages. So the way that those work is that for five or seven or sometimes 10 years, you will get a lower upfront rate. The catch is that it is an adjustable rate, so after that, say seven-year period is up, you will have to either refinance or pay whatever the market rate is at that time.
01:54 Clare
So it could be higher, could be lower. But they are a little bit cheaper up front and so they are getting more popular now.