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CBS News
17-07-2025
- Business
- CBS News
Will mortgage rates fall after the July Fed meeting? Here's what experts expect
With the Federal Reserve's July meeting on the horizon, many prospective homebuyers and homeowners are wondering what it could mean for mortgage rates. After years of relatively high borrowing costs, even the slightest dip could open doors for those hoping to buy or refinance. But the path forward is far from clear. Mortgage rates have been stubbornly elevated throughout the first half of this year, keeping pressure on affordability as home prices remain elevated. And, while inflation has cooled overall compared to recent highs, the latest inflation reading shows that it ticked up again in June to 2.7% after rising slightly in May. Those recent trends will have some influence on the Fed's next move — and that could ripple through to mortgage rates. So, will rates finally ease after the July meeting, or are borrowers in for more of the same? Industry experts weigh in below on what's likely to happen and what buyers can do now to prepare, regardless of which way the wind blows. Find out how affordable the right mortgage loan could be now. Industry experts generally don't foresee meaningful mortgage rate drops right after the July Fed meeting. The reason behind that sentiment comes down to how mortgage rates work. "The federal funds rate doesn't directly control mortgage rates, which track the 10-year Treasury yield," says Steven Glick, director of mortgage sales at real estate investment fintech company HomeAbroad. And, based on historical patterns, a 25-basis-point Fed cut — which seems unlikely given the June uptick in inflation — might only lower 30-year fixed rates by 10 to 15 basis points. This would drop rates from around 6.85% to somewhere between 6.7% and 6.75%. That modest relief isn't guaranteed, however. Casey Gaddy, a senior agent at The Gaddy Group with Keller Williams Empower, notes that markets often price in expected rate cuts ahead of time. So, potential benefits may already be reflected in current rates. For mortgage interest rates to drop significantly, experts say these key conditions would need to align: Explore your mortgage loan options and lock in a top rate today. Though the chances of immediate rate relief are slim, experts point to three reasons to prepare for homebuying now: There's a classic trade-off in real estate: When mortgage rates fall, home prices typically rise. "The mistake I see many make is waiting for interest rates to go down to [buy] their dream home," Gennarelli says. "In the meantime, the price of the home goes up, and they miss that appreciation." His advice? Find a property that works for your family and buy it. If rates drop later, you can refinance to get a better rate while protecting yourself from further price increases. Getting pre-approved for a mortgage now could make a big difference when the perfect house hits the market. The process usually takes three to seven business days if you have all your documents ready, according to Glick. But if you're starting from scratch — gathering pay stubs, tax returns and bank statements while working to improve your credit — the full prep process can take weeks. Gaddy warns that waiting puts you at a serious disadvantage. "You risk watching the perfect home get swept up by a [prepared] buyer while you're still contacting lenders to submit paperwork," Gaddy says. "When mortgage rates fall, inventory typically shrinks," says Glick. "Lower rates bring more buyers into the market, increasing demand and speeding up sales. Homes sell faster, reducing the number of listings." Meanwhile, many current homeowners are hesitant to sell because they're locked into pandemic-era rates of 3% or lower. Gaddy calls this "golden handcuffs" — homeowners staying put rather than giving up rock-bottom rates. The result is more buyers competing for fewer available properties. Mortgage rates are unlikely to drop dramatically after the July Fed meeting, and even if they do, waiting for the perfect rate could cost you more than moving forward now. If you're serious about buying, Gennarelli suggests speaking with a reputable loan officer who can guide you with transparency. If needed, boost your credit score by paying down debt and avoiding new credit inquiries. "A 740 [or higher] score can save you thousands over the loan's life," Glick notes. Getting prepared now positions you to act quickly when the right opportunity comes along, regardless of what the Fed decides.
CBS News
11-06-2025
- Business
- CBS News
Will home equity loan rates fall after the June Fed meeting? Here's what experts say.
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. The potential for home equity rates to fall further after the June Fed meeting depends on multiple factors. Getty Images Even with cooler inflation, the Federal Reserve has kept interest rates steady through the first half of 2025. This cautious approach has left homeowners wondering when borrowing relief might come, particularly with the Fed's June meeting right around the corner. Will policymakers signal future rate cuts or continue to hold the line? This question looms large if you're considering a home equity loan or home equity line of credit (HELOC). While Fed decisions don't directly control these rates, they do influence the broader interest rate environment that affects your borrowing costs. We asked mortgage analysts and lending professionals what homeowners can expect from home equity rates after the June meeting. Below, we'll examine their predictions. Start by seeing how low of a home equity loan rate you'd currently qualify for here. Will home equity rates fall after the June Fed meeting? Industry professionals generally don't expect a notable decline right after the June 18 Fed meeting. "I don't see home equity rates dropping much," Steven Glick, director of mortgage sales at real estate investment fintech company HomeAbroad, says. The odds favor the Fed keeping rates unchanged this month, largely because inflation remains above the 2% target and the economy continues to hold up. When rate changes do come, though, they won't affect all home equity borrowing the same way. Debbie Calixto, sales manager at mortgage lender loanDepot, explains that HELOCs are tied to the Prime Rate, which closely follows the Federal Reserve's benchmark interest rate. "When the Fed lowers its rate, HELOC rates usually decrease by a corresponding amount," she says. Home equity loans, however, connect more to the bond market and broader economic conditions rather than the Fed's interest rate. "While fluctuations are always possible, home equity loan rates will likely remain stable following the Fed's June meeting," predicts Calixto. "Barring any significant economic events, we can expect only minor movements in these rates [this] month." Looking beyond June, the picture improves. Glick sees better odds of a rate cut by fall — and if that happens, he expects home equity rates to ease modestly. Joe Perveiler, senior vice president and home lending executive at PNC Bank, also thinks rates will likely fall over the next six months. However, pinpointing exactly when is difficult. See what HELOC rate you'd be eligible for here. Key considerations when weighing home equity borrowing Beyond keeping an eye on the Fed's imminent move, experts say three practical factors should guide your home equity borrowing decision: Understand your true purpose for borrowing Glick emphasizes being crystal clear about why you need the money. "Using equity for home improvements that add value or to pay off high-interest credit card debt makes sense," he says. "But using it for vacations or risky investments … you're putting your home on the line." Debt consolidation represents one of the strongest cases for home equity borrowing. "If [you're] looking to consolidate debt, today's home equity rates are still substantially lower than average credit card or personal loan rates," Perveiler points out. "It's an excellent option to save on interest costs and lower [your] monthly payments." Know your home sale timeline and long-term goals Besides interest rates, timing matters. "If you plan to sell within the next few years, drawing down your available equity now could limit your flexibility and financial gain when it's time to sell," warns Calixto. She also stresses considering how accessing your home equity fits into your big-picture financial goals. "Will this decision delay retirement savings, college funding or other major milestones? Be sure the short-term advantages don't come at the expense of long-term financial health," she adds. Ensure you can handle the payments Dean Rathbun, executive vice president of United American Mortgage Corporation, encourages asking yourself: "Do I need these funds, and do I have a plan to pay off this debt in the foreseeable future?" HELOCs come with a payment structure that trips up many borrowers. "The most common overlooked item is that the initial years of a HELOC are interest-only," Rathbun explains. "By making the minimum interest-only payments, the balance remains the same. Try to make [more] principal paydowns as you go, so once the loan becomes fully amortizing, the payment won't be as high." Calixto highlights the stakes involved. "While missing a credit card payment might damage your credit score, falling behind on a mortgage can have much more serious consequences, including foreclosure risk," she cautions. The bottom line Instead of getting hung up on home equity loan interest rates alone, Glick advises focusing on your financial stability and what you're trying to achieve. Remember that your home functions as collateral here, so thoughtful borrowing matters more than perfect timing. If you're considering equity borrowing options now, speak with a couple of home lenders to compare rates and full terms. A credible one will help you determine if tapping your home's equity matches your financial goals this June.
CBS News
02-06-2025
- Business
- CBS News
Home equity borrowing advice that owners should know now, according to lenders
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. Before you tap into your home equity, make sure you know what experts say about navigating this type of borrowing now. Getty Images Finding affordable ways to borrow money has become increasingly challenging. Popular avenues such as credit cards and personal loans carry steep interest rates right now, straining household budgets in today's high-rate environment. However, home equity loans and home equity lines of credit (HELOCs) stand out as cost-effective alternatives for consolidating debt, funding renovations or covering major expenses. Since they use your home as collateral, they can give access to funds at lower interest rates. With the average American homeowner sitting on around $313,000 in equity, these products unlock a valuable financial resource when used strategically. Below, lending experts share their top advice for homeowners thinking about borrowing equity right now. Find out how affordable home equity borrowing could be now. Home equity borrowing advice that owners should know now Here's the home equity borrowing advice lenders say can help you save money now: Lock in promotional rates for short-term needs Some lenders are currently offering HELOC rates as low as 5.99% for the first six months, lenders say. Steven Glick, director of mortgage sales at real estate investment fintech company HomeAbroad, says these deals work especially well if you're considering home upgrades that add immediate value to your property. He recommends matching your timeline to the promotional period. If you're planning a kitchen upgrade or bathroom renovation that you can complete within half a year, these starter HELOC rates can provide substantial savings. But don't let a flashy rate fool you, Joe Perveiler, senior vice president and home lending executive at PNC Bank, emphasizes. "Compare multiple lenders and review the full offer, not just the rate and terms," Perveiler says. "Sometimes, a low rate can end up costing more if it has higher closing costs and other fees." Strive to find the best overall deal rather than the lowest introductory rate. Learn more about the home equity options available to you today. Shop for low or no-fee deals Competition among lenders is creating wins for borrowers who take the time to shop around. Banks are waiving HELOC closing costs and offering rate discounts for autopayments as they fight to capture market share. Glick says comparing at least three lenders can help you shave 0.5% to 1% off your rate. As you shop, note that the differences between lenders go beyond basic rates and fees. Debbie Calixto, sales manager at mortgage lender loanDepot, points out that some lenders charge early termination fees while others don't. These hidden costs can impact your total borrowing expense, especially if your plans change. Prioritize high-ROI home improvements HomeAbroad's Glick suggests focusing on projects that offer a significant return on investment (ROI), add resale value or reduce utility bills rather than discretionary upgrades. For example, energy-efficient windows or a new HVAC system can increase your home's value by 5% to 10% while potentially qualifying for tax-deductible interest. With home values up but inventory tight, improvements that boost your property's appeal become even more valuable. Consider getting a HELOC If you're in a stable financial position, Calixto says now could be a great time to set up a HELOC, even if you don't need the funds right away. A HELOC gives you access to funds when needed without holding a balance upfront. "[You] only [pay] interest on the amount borrowed," Calixto explains. That makes this type of borrowing a flexible financial safety net for future expenses. Timing may work in your favor with HELOCs. Since these products have variable rates, expected Federal Reserve rate cuts mean your rate could drop over time. Perveiler notes that today's rates are already lower than earlier this year, and they could fall further if the market shifts. Weigh the advantages and drawbacks of HELOCs and home equity loans Perveiler explains that HELOCs let you borrow only what you need. This helps you keep monthly payments manageable while taking advantage of lower starting rates and higher loan limits than credit cards. But their variable rates mean your payments can increase if market rates rise. Home equity loans work differently. They have fixed rates, which means predictable payments throughout the loan term. You get a lump sum upfront that you can spend or invest as you see fit, with no ongoing account fees. The downside is the risk of borrowing too much and paying unnecessary interest, or borrowing too little and needing another loan later. Origination fees and closing costs can also make them more expensive than HELOCs in some cases. The bottom line "Using your home equity can be valuable [for] consolidating debt, [funding high-return] investments or [improving] your monthly cash flow," says Calixto. "When used responsibly, [it] can be a powerful [way to] build wealth and increase financial flexibility." Before committing to either home equity borrowing option, speak with at least three lenders to compare rates, fees and terms. A trusted mortgage professional can help you achieve the right balance between immediate savings and long-term financial security.
Epoch Times
03-05-2025
- Business
- Epoch Times
Renting 60 Percent Cheaper Than Buying in Top 100 US Cities: Study
A recent Only five cities were found to offer cheaper rates for buying: Grand Rapids, Michigan; Pittsburgh, Pennsylvania; Lakeland, Florida; Philadelphia, Pennsylvania; and Miami, Florida. 'Unfortunately, high interest rates and escalating home costs are still pricing many Americans out of home ownership,' Amresh Singh, HomeAbroad founder and CEO, told The Epoch Times. 'New developments also tend to be more expensive and are just out of reach for many people.' Singh said it all comes down to the 'buy-to-rent' ratio. 'You have to determine the amount of your mortgage payment and taxes and compare that to the cost of a similar property for rent,' he said. 'If you're going to be paying a similar amount of money for rent, then it makes more sense to buy. However, if your mortgage payments and taxes will be much higher than renting, then leasing would be the better option.' Related Stories 4/29/2025 5/1/2025 A small buy-to-rent ratio means that home ownership is a more viable choice, but a higher buy-to-rent ratio would make renting a better choice. Singh also advocates for the '5-year' rule. 'If you're planning to stay in the home for just 5 years or less, then renting might make more sense because you may need more time to build equity in the house,' he said. 'If, on the other hand, you plan to spend 5 to 10 years in the home, buying would probably be the way to go as you can use that time to live in your investment and build wealth.' Other factors to be considered are the location of the property, historical appreciation, population, job growth in the region, and quality of life offered. 'It's all about the potential appreciation of the home,' he said. Another consideration for buying is being able to make the typically required 20 percent down payment. 'If you can't put down 20 percent, you may have to bear the additional costs of private mortgage insurance, which will be added to your monthly mortgage payments,' Singh noted. 5 Cities Where Buying Beats Renting Grand Rapids was named America's least expensive place to buy a home compared to renting, with a cost difference of just 1 percent. According to the survey, the average monthly mortgage payments in Grand Rapids are $1,773, compared to the average monthly rent of $1,752. With a median home price of just $261,255 and a cost of living that's 5.5 percent lower than the average U.S. community, buying a home there may be a better financial option than renting. According to a recent report from The job market is booming, especially in the health-care industry, and the city also offers an abundance of family recreation from Lake Michigan beaches to over 75 parks and nature trails throughout the city. For adults, there are a large number of art galleries, museums, music venues, and restaurants. Pittsburgh's buy-to-rent ratio is 11 percent. Monthly mortgage payments average $1,164, while the average rent is $1,453. With a median home price of $229,000 and a cost of living rated 8.2 percent lower than the average U.S. community, Pittsburgh was listed as the second-most-affordable location to purchase a home. Lynne Bingham, leader of The Bingham Team at Howard Hanna Collier in Pittsburgh, was not surprised that the 'Steel City' ranked high as one of the best places to buy vs. rent property. 'We have been seeing an influx of people into the city and suburban areas because of the growing technology and medical industries,' she told The Epoch Times. Companies such as PayPal, Uber, and Google have been moving into the area, creating more jobs and attracting more people. 'This includes some young doctors from Boston and Connecticut, as well as younger people from New York, Washington, and even Texas,' Bingham said. While housing is affordable compared to many other American cities, property taxes tend to be on the higher side, she said. 'Of course, they still may be a bargain for those coming from New York or other areas in the Northeast.' Pittsburgh is considered a mid-sized city, with a population of over 300,000. It's the second-most populous city in Pennsylvania, and the entire Pittsburgh metropolitan area is home to over 2.4 million. Bingham noted that several sections of downtown Pittsburgh have undergone complete renovations, and some new luxury townhomes in the Strip District are garnering as much as $1.2 million. 'It's a great walkable area, and we've actually had a lot of seniors downsizing from larger suburban homes and moving into the area,' she said. Lakeland and Philadelphia ranked third and fourth, respectively, with a 15 percent buy-to-rent ratio. Median home prices in Lakeland are $340,000, and in Philadelphia, they are $350,000. While Miami is continuously noted as one of the country's most expensive areas, its buy-to-rent ratio is fairly low at 18 percent. Average monthly mortgage payments are $3,223, compared to average rents of $2,721. Current median home prices are $515,000. Most Expensive Areas to Buy Conversely, some of the nation's most expensive areas to buy are in the West and Midwest. San Jose, California, is ranked as the most expensive city in the United States to buy a home, compared to renting. With a buy-to-rent ratio of 131 percent, the average monthly mortgage payments are an astronomical $7,558, compared to average rentals of $3,268. San Jose's median home price is listed at $1.3 million. The city's cost of living is also 131 percent higher than the U.S. average. With a buy-to-rent ratio of 118 percent, Los Angeles is the nation's second-most expensive area to purchase a home. The median home price of $1.1 million carries a typical monthly mortgage payment of $6,499, compared to the average monthly rental cost of $2,984. The cost of living in Los Angeles is 61.7 percent higher than the rest of the country. Although located in the heart of the Midwest, Omaha, Nebraska, has a 117 percent buy-to-rent ratio, making it much less expensive to rent than to purchase. Monthly rents average $1,362, while monthly mortgage payments average $2,962. Median home prices in Omaha are $392,450. Rent-to-buy ratios in Austin, Texas, and Des Moines, Iowa, were both over 100 percent. Austin's average rent is $1,688, while mortgage costs typically exceed $3,600 per month. In Des Moines, monthly rents average $1,270, compared to mortgage payments of $2,584. Some areas of the country have more manageable cost differences between renting and buying, including Columbia, South Carolina; Tampa, Florida; and Palm Bay, Florida. In these areas, said Singh, deciding whether to rent or buy could be a more difficult choice. Singh said that the decision to buy versus rent should also factor in estimated home repair costs, additional monthly payments such as home insurance or homeowner association fees, and whether the buyer can retain ample savings after making a 20 percent down payment and covering closing costs. 'If any of these areas present a challenge, renting could present a better option,' he said.
CBS News
31-03-2025
- Business
- CBS News
What's the mortgage interest rate forecast for April 2025?
High housing costs have stalled many Americans' homebuying plans in recent years. But mortgage interest rates have dipped below their recent peaks, offering prospective buyers some relief. Despite this progress, economic uncertainties loom — which could affect the lending market. If you're house hunting, knowing where rates might head this April could help you calculate potential monthly payments and set a realistic budget before you fall in love with a home. See what mortgage interest rate you could qualify for here . Mortgage interest rates in April will likely stay in the 6.5% to 7% zone, according to Steven Glick, a licensed mortgage loan officer and director of mortgage sales at HomeAbroad, a real estate agency. However, a couple of other scenarios could play out. We spoke with three industry professionals who broke down what economic conditions would trigger rates to rise, fall or hold steady in the coming weeks: These economic factors could push mortgage rates higher: A significant Fed policy change might lead to lower mortgage rates. Here are three potential rate-reducing factors: See how low of a mortgage interest rate you'd currently qualify for now . The current economic picture shows mixed signals, which may keep mortgage rates stable: Mortgage professionals recommend watching five factors closely if you're buying a home soon: Mortgage rates in April will likely stay steady, according to the experts we spoke to. They might ease later in 2025, but waiting could backfire if home prices rise or inventory tightens. Your best move? Consult a few lenders now to understand your options. "Focus on your affordability," Calixto advises. "If you find a home that fits your needs and the monthly payment is manageable, that's a signal it may be the right time to buy." Get pre-approved to know what you qualify for and be ready to act quickly. Remember, you can always refinance later if rates fall.
