© MoMo Productions/Getty Images Black family, mother working from home holding toddler-age daughter, with husband and son in background
The weather may be cooling down, but the real estate market remains hot – for now. As the Fed signals that higher interest rates may be on the horizon, here’s what you need to know during these waning days of the pandemic real estate economy.
1. The Fed’s role in the mortgage market
Much hinges on the Fed chairman’s monthly remarks, including how much mortgage borrowers pay in interest. Federal Reserve policy indirectly affects mortgage rates by setting the borrowing prices for banks themselves. And it’s not just primary mortgage rates, either. Fed policies also influence interest on secondary mortgage products like home equity loans and HELOCs, as well as less common loan types like ARMs. Here’s what to know.
2. The refi window remains open
Although mortgage rates rose slightly this week, the Fed didn’t signal an imminent shift in its policy, so borrowing costs are still near historic lows. Take advantage of these low rates while they’re still available. And check out our new refinance calculator that does the work for you.
Video: Why mortgage rates are rising (CNBC)
Why mortgage rates are rising
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3. The Black home appraisal gap
Black-owned property generally appreciates more slowly than comparable white-owned homes, which contributes to the ongoing racial wealth gap. It’s a well-documented problem, and one the housing industry writ large says it’s taking steps to address.
4. Rent and your credit score
In an effort to make homeownership an option for more Americans, Fannie Mae now allows renters to include their payment history as a measure of their creditworthiness. Historically, rent payments have not contributed to tenants’ credit scores.
5. Major signs of structural issues in your home
There are three major categories of warning signs that your home is in urgent need of mechanical attention. Even if you’re not planning to buy or sell property anytime soon, these are good things for all homeowners and prospective buyers to look out for.