Curious what this will be? I'm building a house that I hope will be done summer or early Fall. Then we'll sell our current home and get our mortgage for our new home. Both of those transactions will go better for me if rates stay low. Just curious if these inflation rates are a factor for lending rates to increase and if so, how fast could the go up in the next 6-9 months?

Banker here.

30 year rates will get to 4% this year. I personally think there will be enough of a stock market slowdown during the year for the 10 year, which mortgage rates are based upon, to retreat from there to the 3.75% range.

It's a double whammy unfortunately - inflation impacted the buying price on your new build (they have all raised prices 15% or more) and fed fund hikes will drive your rates on new mortgages higher, although some getting priced in now. I'd be shocked to see below 3.5% again for a while.

I don't even know how it will matter.

Another +0.5% is basically +$100 monthly on $500K borrowed.

I'm not quite sure those financially able to purchase a one are going to decide not to over $100 (or $50 at half that). Yes it amounts to a 4.3% increase in monthly payment but still...

It feels like rates need to be 4.5-5% to really make an impact.

Also, how much money circulated into the economy from people basically pulling out home equity that would not otherwise with the massive increase in home prices?

Agree, 5% seems to be the sweet spot

Thanks. I was just curious. I figure I've missed the lowest but I understand that these are still historically great rates. Just curious if there was a consensus on how much they could rise over the next year. It's not going to change what I do, this house is underway. Just something I was thinking about.

On my way to work this very thing was being discussed on Bloomberg surveillance and they didn't seem to have a consensus. That makes me feel better that there won't be a significant increase while I (slowly) watch this house built

The Grinder (99) said:

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Thanks. I was just curious. I figure I've missed the lowest but I understand that these are still historically great rates. Just curious if there was a consensus on how much they could rise over the next year. It's not going to change what I do, this house is underway. Just something I was thinking about.

On my way to work this very thing was being discussed on Bloomberg surveillance and they didn't seem to have a consensus. That makes me feel better that there won't be a significant increase while I (slowly) watch this house built

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I'm in the same boat. Signed back in August and hopefully can close by September. I'm anxiously watching the rates rise as well.

Last go around the Fed funds rate couldn't even get back to 2.75% before the market came crumbling down (Dec 2018) and they had to start lowering rates again. What are we thinking the number will be this time? 2?

This sure won't help!

US Industrial Production Unexpectedly Contracts In December

FRIDAY, JAN 14, 2022 - 09:20 AM

US Industrial Production was expected to slow its re-acceleration in December with a 0.2% MoM increase versus November's 0.5% MoM rise, but things were notably worse with Industrial Production contracting by 0.1% MoM.

Source: Bloomberg

Total US Industrial Production is hovering right above pre-COVID-Lockdown levels, well short of 2018's record highs...

Source: Bloomberg

Worse still, Manufacturing production tumbled 0.3% MoM in December, dramatically worse than the +0.3% MoM expected...

I remember starting work in 02 and 03/04 everyone was talking about 4% money being historic lows - buy a house! now we're at 3-4% and still at historic lows. if you're in a $100 band for 20 years or so, when can the hype be over? to me, this is what normal is now - if you get into the 2s, good for you, you had good timing; and if you're in the 4s, crappy timing, refi when you can. 2.79 here

It's expected that there will be 3 rate increases this year with the first one happening in March. At the end of the day, you will still have historically low rates for the most part.

Some good info on what could happen going forward:

jagvocate said:

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I have a 30 year fixed at 2.9% so inflation means my future dollars, which repay the loan, are worth less than the ones I got to make the purchase

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30-year, 2.375%

Refi'ed on 30-year fixed at 2.28%

Refi was #1 on my to-do list for 2022.

Some good info. Basically when it comes down to it… we are in for some incredibly tough times. When will that be? Like he said policy makers will try to kick the can down the road to make the short term more manageable. Long term we are screwed.

Stat Monitor Repairman said:

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Refi'ed on 30-year fixed at 2.28%

Refi was #1 on my to-do list for 2022.

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You've already refi-ed in 2022? Or you're hoping to refi again?

Already.

So glad I refi'd at 2.5% on a 30 yr with no points.

I'm looking to refi right now. Currently at a 30 year, $3.25%.

Got quoted today 2.75% for a 15 year term.

ya'll think I can beat that?

when did you do this and through who?

Sub 3's for 30 years are gone…for now. We have had a hell of a jump the last month. Not sure that last time I have seen this quick increase. 2004? 2016 was big but not close to this one. My contact info is in my profile. I do not quote based on internet posts. Need much more info.

suburban cowboy said:

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when did you do this and through who?

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Oct 2020, Willow Bend Mortgage

You locked at the first all time low. 8-9-2020 we hit bottom with a repeat late 20 and early 21

SteveBott said:

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You locked at the first all time low. 8-9-2020 we hit bottom with a repeat late 20 and early 21

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Yeah I actually locked it in Aug 2020 and closed in Oct. Was just too good to pass up.

Oh I know. I remember just being speechless at the time. Well not really my phone and e-mail blew up. Stupid cheap money

i got quoted 2.75% for a 15 year

I got in at 2.9% a year ago and will be content with that.

What are most 30 year rates going for now?

Mid 3s depending on several data points in an individual file

https://www.mortgagenewsdaily.com/markets/mortgage-rates-01202022

Thank you!

Any guidance over the next 4-6 months? Looking to buy first house in Houston this spring /summer but weighing accelerating that timeline if rates continue to move up.

Been awhile since I've seen you post. Do you remember when we met?

As for timing it is a waste of time. In 20 years of mortgage I learned 18 years ago it is useless to predict rates. Anyone says they can I would not trust. Last week was a perfect example. Stocks took the worst dive in years. An all week decline. Usually that's good for my rates. But they went up except Friday. Made no sense. Usually money flees the equity into bonds during runs but not this time.

I would just maybe set up an action plan now. Be prepared to execute if you think it's the right time whenever that is. Even if we go up another 1/2 point it would still be historical lows.

Of course Steve! Hope all is well sir. Been too long for sure, but I've been saying that a lot the last year or two it seems.

Appreciate the input. To be honest I'm looking at a couple options, either purchase a primary residence at the "renovate and flip" price point or something at my lifestyle standard with modest to little work needed, or buy a rent house first. Started poking around the market this time last year but prices were just too crazy, and while that hasn't changed the urgency to lock in cheap debt has.