What is the board's predictions regarding mortgage rates over the next 5 years?

I think trending down slowly over the next 3 years


Unsolicited advice

If you’re waiting to buy when rates drop, don’t. They’re not that high historically.
When I was younger, I got a 12% rate And was lucky.
Rates dropped and buyers loaded up and we sold for 50% profit in 2 years.
Rates kept coming down and prices kept shooting up.

Lesson- buy now. When rates come down, prices are going to increase and possibly dramatically

Get an ARM.

Thank me later.

Marry the house or date the rate. Problem is that there will be a lot of competition to buy “that” house when rates drop

I think they’ll settle around 6.5%. We’ve had unusually low interest rates for 15 years.

Settle around 6.5%. Still historically low. People have been spoiled the last several years.

Never try and time the market. Rates are only fixed when they’re rising.

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Get an ARM. Thank me later.

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Sounds like a terrible idea to me. Why not just refinance if it comes down?

Sure it will cost you a couple grand but you’ve got no risks if rates sky rocket

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I think you shouldn’t base any decision of homeownership by timing the rates. If you did get in before a big drop, refinance and move on with your life.

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That's where we're at. We felt forced into the market again earlier than expected due to exploding rent prices and term-length volatility. Bought in at 5.5%, but as a previous homeowner during "the good ol' days," that's double the rate I'm used to. I see most on here don't expect rates to ever come down near those lows again.

We’ll never see sub 4.0 again.

If you can’t pay cash for something, you can’t afford it.

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Well. For starters... when the rates come down what do you think happens to the ARM rate?

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It obviously goes down with it but if we drop significantly from 6 then you’d be stupid not to refinance to fixed anyways. We’d be sitting at near all time low interest rates that we saw with COVID.

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The ARM rate will always be lower than the "market" rate on a 30 year or 15 year fixed at any given time.

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Because they have to compensate you to take the risks of the rate going up.

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Refinancing is always an option, but it often strips equity and finances the cost of the loan back into the loan (cost plus interest).

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It costs a couple grand. If you’re looking long term, it’s chump change for what you’re saving. You also don’t have to refinance and can evaluate the costs vs benefits at that time. It’s also completely optional to roll the costs into the loan.

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I took an ARM on my first home purchase. I paid what I would have been paying had I gotten a fixed. I knocked out PMI in just over 2 years. While in that mortgage, rates went down. And eventually came back up. But my principal balance was markedly lower so I was still in a win position.

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I took a fixed at 4.5%. Refinanced at 2.99%. Got rid of PMI and I will only pay over 3% if I sell my house. But I don’t see how either of those scenarios are relevant to making a decision now.

We are still in somewhat of a low rate environment. I just see no benefit to doing an ARM unless you’re only looking at the short term. I doubt we’re seeing 3s anytime soon so your potential savings are minimal while the risks are pretty high.