I’m the chief economist for a mortgage company that has funded over $100 billion in loans. These are 3 things to know about the housing market now.

As home prices and mortgage rates rise and housing stock remains seriously constrained, many buyers are asking themselves: Should I buy? And if I want to buy, what should I know about the housing market now? That’s why MarketWatch Picks has created a series where we ask leading economists and real estate professionals for their views on today’s real estate market. For this one, we spoke to Cameron Findlay, chief economist and executive vice president of capital markets for AmeriSave Mortgage Corporation, which has funded more than $115 billion in loans since its start in 2000. Findlay has spent more 20 years in the mortgage industry — previously president and head of capital markets at mortgage lender LoanSnap, chief economist at LendingTree, and chief economist and head of capital markets secondary marketing at Discover Financial Services. We asked him what homebuyers should know about the market right now. (See the lowest mortgage rates you can get here.)

Mortgage rates are on the rise – but put that in perspective

Rates have risen this year and are unlikely to come down significantly anytime soon, Findlay says. Indeed, from early 2022 to now, rates have risen from just over 3% to around 6%, according to Bankrate data. “If you want to buy a house, the longer you wait, the more you risk losing money or buying power,” says Findlay.

That said, it’s impossible to predict the future, but if you’re worried about rate hikes, you might want to consider a rate lock. These “usually allow you to lock in today’s rate for a period of 90 days,” says Findlay. Indeed, other pundits have been debating what will happen to mortgage rates in the coming months, with inflation playing a big part in the path of rates.

Although rates have risen significantly this year, Findlay points out: Mortgage rates are still somewhat low by historical standards. “Rates were 18% the last time inflation was this high in the early 1980s, and they hit 8.5% as recently as 2000,” Findlay says. (See the lowest mortgage rates you can get here.)

Don’t expect house prices to drop significantly anytime soon

With data from Freddie Mac indicating that more than 3 million homes are missing in the United States, there is still an inventory crisis and new home construction is slowing significantly. This means that prices are unlikely to fall significantly anytime soon, even if buyer demand begins to decline. “In some markets, prices may plateau if rates continue to rise, but if you plan to stay on the sidelines until prices start to fall, you may be waiting a while,” says Findlay. . Other economists agree that even if the housing market cools down a bit, house prices won’t drop significantly.

Rates ‘vary widely’ by lender and loan type, so shop smart

Market volatility has created a wider-than-normal range of mortgage rates between lenders, Findlay says. “Rates now vary widely from provider to provider, which can create thousands of dollars of difference in your borrowing costs,” he says. “For every one percentage point increase in a mortgage rate, the borrower of a $300,000 loan will pay $190 more per month. Over the full term of a 30-year mortgage, that’s a substantial difference — over $67,000,” Findlay says. (See the lowest mortgage rates you can get here.)

Findlay says buyers may want to look at different types of loans. “A good rule of thumb is that if you plan to stay for less than 7 years you may want to consider a higher loan rate with a larger repayment to cover closing costs and moving costs and if you plan to keep the house longer than 7 years, you should go for a lower rate,” says Findlay. The rebate funds can be used to offset fees and cover not only non-lender related closing costs, but also expenses paid upfront such as property taxes and insurance premiums.Indeed, if you only plan to be in the home for a few years, you can also consider an adjustable rate mortgage (ARM), which can make you save money as long as you plan to sell within 5-7 years.