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News & Insights | Mortgage News

![Mortgage News: Rental Payments Will Now Help You Buy A Home](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fd1a9e1a050a24fe69b62ff958d9b6f30)

<br>

Here’s a look at the latest developments in the mortgage market this week. 

## Want lower payments? Try renting out your home. 

Short-term rental sites like Airbnb are easy avenues for homeowners who want to earn additional income by renting out their home. More than [50% of Vrbo owners](https://www.housingwire.com/articles/48822-quicken-loans-will-now-let-vrbo-hosts-use-rental-income-to-refinance-their-mortgage/ "external") cover at least three quarters of their monthly mortgage payment with the earnings. And on top of helping you pay off your loan faster, they can help you qualify for more savings when you refinance. 

[Since 2018](https://www.housingwire.com/articles/42487-airbnb-hosts-can-now-use-income-in-refinance-mortgage-apps/ "external"), Fannie Mae-backed lenders like Better Mortgage have allowed homeowners to count short-term rentals as an income source on their conforming loan application. Applicants need to back up the numbers with reported income on their tax return, or a signed lease agreement. Within just a month of having their new guidelines, [Better Mortgage approved over $30 million](https://theshorttermshop.com/short-term-rentals-in-the-usa/ "external") in loans from short-term rental hosts. 

Counting the extra income can lower your [debt-to-income ratio (DTI)](https://better.com/content/what-is-a-good-debt-to-income-ratio). That’s one of [the most important numbers lenders use](https://better.com/content/3-most-important-numbers-mortgage-application/) to gauge how likely you are to pay back the loan. If your DTI is lower than it was when you first financed, it could help you reset your loan terms, take out a larger loan amount, or get approved for a [cash-out refinance](https://better.com/content/cash-out-refinancing-gives-you-options/). 

Many homeowners choose to spend their refinance savings on home renovations, which add value to the property or raise the quality of the rental. If you’re on the fence about what refinancing can help you achieve, read up on [why it may be a good time for a new loa](https://better.com/content/6-reasons-to-refinance-your-mortgage/)n. 

## As home prices rise, so do property taxes

Most homebuyers can expect to pay higher taxes on a new home this year, as home prices rise around the country. [Property taxes are expected to jump 6.5%](https://www.realtor.com/news/trends/why-property-taxes-are-rising-and-what-homeowners-can-do-about-it/ "external") by the end of 2021. 

Property taxes are calculated based on property value, which rises alongside home prices when  any housing market becomes more expensive. The national median price of an existing home has risen by [7.2% since 2020](https://www.realtor.com/news/trends/why-property-taxes-are-rising-and-what-homeowners-can-do-about-it/ "external"), and is expected to hit an [11% gain](https://www.realtor.com/news/trends/why-property-taxes-are-rising-and-what-homeowners-can-do-about-it/ "external") in 2021. 

Property tax impacts how much you pay for your home each year. You can find the amount on the loan estimate and closing disclosure you receive from your lender when your offer gets accepted. Every municipality sets its own tax rates, so house hunting in an area with a lower property tax rate may offer some extra wiggle room to buy a higher-priced home. To figure out what you’ll owe, [read more about how property taxes work](https://better.com/content/how-to-calculate-property-tax-on-a-house/) and how to calculate them.

#### Considering a home loan?

Get your custom rates in minutes with [Better Mortgage](https://better.com/). Their team is here to keep you informed and on track from pre-approval to closing. 

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Extra cash from short-term rentals could help homeowners qualify for more loan options when they refinance.

Renting Out Your Home Can Help You Refinance

Blog post image for Renting out your home can help you refinance

Renting out your home can help you refinance

![Mortgage News: Over 1M Homeowners Can Save With RefiPossible](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F02441af417424ba98264ffde5498f817)

<br>

## As rates climb, a new program could help more homeowners refinance

Mortgage rates may be on the rise, but they’re still close to historic lows. The popular [30-year fixed rate jumped to 2.87%](http://www.freddiemac.com/pmms/ "external") two weeks ago, and now remains in roughly the same place at [2.86%](http://www.freddiemac.com/pmms/ "external"). That’s not far off from its all-time low of [2.65%](https://www.washingtonpost.com/business/2021/01/07/fixed-mortgage-rates-sink-lowest-levels-history-could-be-headed-higher/ "external"), putting many homeowners in a good position to save on a refinance. 

If you’re interested in resetting your home loan, a new program could help you lock in a lower rate. [RefiPossible from Freddie Mac](https://better.com/content/you-could-save-on-monthly-costs-with-refipossible-tm) will be available to over a million homeowners starting August 30th. It’s a loan option designed for those who may not qualify for a conventional refinance, or missed the 2020 refinance wave. If you’re eligible, you’re guaranteed to cut down your monthly payments by at least $50, and estimated to save up to $250 per month, or $3,000 a year. Better Mortgage is proud to be one of the first lenders offering RefiPossible loans on its August 30th launch date. 

If you’re waiting to see rates drop further before you refinance, it could [cost you more in the long run](https://www.yahoo.com/now/mortgage-rates-edge-higher-homeowners-220500367.html "external"). Even as new Covid-19 variants create potential uncertainty in the economy, mortgage rates aren’t expected to reach the record lows of 2020 again. In fact, they should be [inching further up](https://time.com/nextadvisor/mortgages/mortgage-predictions-2021/ "external") by the end of the year. With RefiPossible, you would start saving now. [Check out today’s rates online](https://better.com/start) to see how the numbers on your mortgage measure up, and [learn more about RefiPossible](https://better.com/content/you-could-save-on-monthly-costs-with-refipossible-tm) to see if it’s the right move for you.  

## How homebuyer Marcela Roza scored a Better Home Run

Better isn’t just a mortgage company—it’s a one-stop shop dedicated to making homeownership more accessible. While Better Mortgage helps you buy and refinance your home, Better Cover and Better Settlement Services are there to help you with homeowners and title insurance, respectively. When we work with you on all three, we call it a Better Home Run. 

Last August, New Jersey resident Marcela Roza became a home-run client when she found Better online. “I work in advertising and talk to people all day. When it comes to my personal needs, I want the process to be online, easy, and convenient,” she says. 

Marcela bought a home with Better Mortgage, and insured it through Better Cover and Better Settlement Services. This saved her time and energy that she would have spent shopping around elsewhere, and helped her close on her first home quickly—even in the middle of a pandemic. 

If you’re on the hunt for insurance, [Better Cover](https://better.com/hoi) and [Better Settlement Services](https://better.com/title) can help you make it happen quickly and efficiently. Or, study up to figure out what you need with [our guide to homeowners insurance](https://better.com/content/why-do-i-need-homeowners-insurance) and our breakdown of [why title insurance matters](https://better.com/content/title-services/). 

#### Considering a home loan?

Get your custom rates in minutes [with Better Mortgage](https://better.com/). Their team is here to keep you informed and on track from pre-approval to closing. 

<br>

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RefiPossible is a loan option designed for those who may not qualify for a conventional refinance, or missed the 2020 refinance wave.

Over 1M Homeowners Can Save With RefiPossible™

Blog post image for Over 1M homeowners can save with RefiPossible™

Over 1M homeowners can save with RefiPossible™

![Real Estate Trends from Better Week of August 16, 2021](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F86a928dd47684566b3223665cb125cbf)

<br>

Here’s a look at the latest developments in the real estate market.

<ul>
<li><strong>According to Realtor.com we can expect to see a market “tilted back towards buyers” beginning this fall.</strong></li>
<li><strong>CNBC reports inventory of new homes for sale jumped from a 5.5-month supply in May to a 6.3-month supply in June. </strong></li>
<li><strong>WFH trends are ending as two-thirds of Manhattan office employees are expected to return to the office.</strong></li>
</ul>

Danielle Hale, Chief Economist at Realtor.com, is somewhat optimistic about the home buying season this fall. “The trends I see happening are a market which is tilted back a bit more evenly towards buyers,” Hale explains. 

Having said that, she also cautions buyers to not get too excited just yet. "Homes are still selling quickly, but not as fast as they have been. I still believe prices will rise, just not at the double-digit increases we've seen for 2021. I also think some buyers may drop out of the market if we see mortgage rates rise as many people are already at the [top of their budget.](https://better.com/content/how-to-help-clients-avoid-buyers-remorse)” 

Hales cautions buyers to “stay prepared by having all your pre-approval financing in place.” She also advises buyers and their agents to keep setting alerts on properties that fit specific search criteria so once those listings hit the market agents can act quickly and help buyers [make competitive offers](https://better.com/content/how-to-get-an-offer-accepted-in-todays-market).

Redfin recently reported good news for buyers. “Like a slow turning ship, the housing market’s supply side is gradually gaining momentum as homes for sale begin to pile up and pending sales continue a steady and seasonal decline. As both of these trends continue in the weeks ahead, prices will stop rising as rapidly as they have been and an increasing number of homes for sale will likely see price drops.”

#### Home Sale Prices Up 20% From 2020 
4-week rolling average of the median sale price of homes sold

![Line Graph of Home Sales Prices January 2019 Through July 2021](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F79336c9280f74e15a30b08c262f96560)

<p class="legal">Source: Redfin</p>

Better Real Estate Agent Ray Markey reports some good news for buyers in parts of New Jersey. “Inventory is increasing in Southern New Jersey including Camden and Gloucester. I feel a shift in the last four weeks.”

## Industry Trend

According to [The National Association of Realtors](https://fred.stlouisfed.org/series/MEDDAYONMARUS "external"), the US Existing Home Median Sales Price is at a current level of $363,300, up from $350,400 last month and up from $294,400 one year ago. This is a change of 3.68% from last month and 23.40% from one year ago. The speed of homebuying has also changed, with buyers moving more quickly than they did even at the beginning of this year: average days on market for June  2021 hit 37 days, down from 76 days in January.

#### Housing Inventory: Median Days on Market in the United States

![Trend lines graph of average days houses are on market in the US from January 2017 to July 2021](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F721f529d71b440c8bc5cfa77d1b4bc7a)

<p class="legal">Data source: realtor.com</p>

While home prices are still up and purchase timelines are still urgent, there is some positive news for buyers on the horizon: bidding wars have cooled down since since April. Though [competition among would-be homebuyers is still hot](https://better.com/content/be-ready-for-bidding-wars-in-todays-market), the recent increase in home supply has [reduced the amount of bidding wars by 7% in June](https://www.redfin.com/news/real-estate-bidding-wars-june-2021/ "external") compared to May, according to Redfin.

Better Real Estate Agent Jack Mager reports activity in the Maryland market, saying, “Days on market in central Maryland are slightly increasing, but not due to more inventory which is still very low. It’s due to a steep increase in prices in all price segments.” However, Mager does concede a promising market shift for buyers. “Some pockets are slowing down overall.”

In the primary mortgage markets, rates for a 30-year Fixed rate mortgage were at 2.81% recently according to MND’s Daily Rate Survey. 

#### “Crack in Pandemic Housing Boom.”

Major business media is also reporting a crack in the pandemic housing boom. [According to a CNBC report](https://www.cnbc.com/2021/07/26/housing-boom-is-over-as-new-home-sales-fall-to-pandemic-low.html "external"), the “housing boom is over as new home sales fall to pandemic low.” Reading beyond the headlines, the report points to a key indicator—inventory. “The inventory of new homes for sale jumped from a 5.5-month supply in May to a 6.3-month supply in June.” Most importantly, “last fall it sat at a low of just 3.5 months.”

#### Work From Home Winds Down 

According to the [Real Estate Board of New York](https://www.rebny.com/content/rebny/en/newsroom/press-releases/2021_Press_Releases/As_New_Yorkers_Return_to_the_Office_Real_Estate_Industry_and_Labor_Release_Safety_Guidelines_for_Commercial_and_Residential_Buildings.html "external"), “nearly two-thirds of Manhattan office employees expected to return to the workplace by the end of September.” James Gorman, CEO of Morgan Stanley, recently commented on a [Wall Street Journal Podcast](https://www.wsj.com/podcasts/the-journal/wall-street-ceos-say-working-from-home-isnt-working/e4f0de44-4d2e-4cd9-8e8c-0d569bae291d "external"), saying “At Labor Day, I’ll be very disappointed if people haven’t found their way into the office.” When Jamie Dimon, CEO of JP Morgan, was asked how WFH worked for his company, Dimon replied, “It doesn’t work for our culture.”

#### What real estate agents can do next:

- Prepare a fall marketing plan that includes a list of potential sellers to contact.
- Create a fall market e-news blast or e-newsletter for distribution and website content.
- Reconnect with buyers who took a summer or vacation break from actively looking at property.

You can also schedule a call with an Agent Experience Partner to learn how you can save your next client $2,000*.

<br>

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As bidding wars cool off and home prices begin to level out, buyers who took a break this summer might be ready to dive back in. 

Preparing Homebuyers for a Favorable Fall

Blog post image for Preparing Homebuyers For A Favorable Fall Housing Market 

Preparing Homebuyers For A Favorable Fall Housing Market 

![ortgage News: Are FHA Loans The Answer For First-Time Buyers?](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F7f2e62db76504f68ba37b2d369b56e94)

<br>

## First-time homebuyers are getting ahead with FHA loans and low rates

After a month-long decline, homebuying is back on the rise around the country as the number of mortgage applications to buy a home [rose 2% last week](https://www.mpamag.com/us/mortgage-industry/market-updates/mortgage-applications-up-as-purchases-rebound/302038). More buyers are choosing FHA loans, which [jumped 3.3% from the week before](https://www.cnbc.com/2021/08/11/weekly-mortgage-demand-hints-at-return-of-the-first-time-homebuyer.html). It’s a sign that even with today’s record high prices and historically low inventory, more shoppers—especially first-time buyers—are landing homes with help from government-backed loans.  

FHA loans are insured by the Federal Housing Administration, and come with looser eligibility requirements than conventional loans. They often give first-time buyers a path to homeownership through lower credit score and down payment requirements—but there’s a limit to how much you can borrow. Wondering if a government-backed loan is right for you? [Read our guide to FHA loans](https://better.com/content/what-is-an-fha-loan/). 

Historically low mortgage rates are also driving more homebuyers to the market. America’s most popular home loan, the 30-year fixed rate mortgage, [ticked up to 2.87% last week](http://www.freddiemac.com/pmms/). That’s not far from the rate’s all-time low of [2.65%](https://www.washingtonpost.com/business/2021/01/07/fixed-mortgage-rates-sink-lowest-levels-history-could-be-headed-higher/), but it’s a 0.10% jump from the week before. 

The market drove rates up in response to the country’s latest jobs report. Employment and wages are increasing, and a [healthy economy usually means higher mortgage rates](https://better.com/content/what-affects-mortgage-rates/). It may help to move quickly on your home loan before they can rise further, so [see what today’s rates mean for your budget](http://better.com/start). 

An upcoming change from Fannie Mae should help open even more doors for first-time buyers. On September 18th, [restrictions that impact how lenders evaluate credit scores will be rolled back](https://guide.freddiemac.com/app/guide/bulletin/2021-28?utm_source=eloqua&utm_medium=email&utm_campaign=2021-08-11_POLICY_Guide-Policy&elqTrackId=747C89626F11F8DD6608D507513F79CC&elq=3c2cd261068e4b0598a1b73e455c6b5b&elqaid=10401&elqat=1&elqCampaignId=9764). Instead of taking only the lowest of two FICO scores between a primary and co-borrower, they’ll combine both together for an average score. That means every applicant will have either the same score or higher when applying to a Fannie Mae-backed lender like Better Mortgage. 

This could make getting a home easier, since credit scores are a large part of how any lender determines your ability to pay back the loan. Get a sense of [how your credit score affects your mortgage](https://better.com/content/how-your-credit-score-affects-your-mortgage/), and ways you can improve it before applying. 

## Considering a home loan?
Get your custom rates in minutes with [Better Mortgage](https://better.com). Their team is here to keep you informed and on track from pre-approval to closing. 

<br>

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With rates still low, many first-time buyers are becoming homeowners through government-backed mortgages, including the FHA loan. 

Are FHA Loans The Answer For First-Time Buyers? 

Blog post image for Are FHA loans the answer for first-time buyers?

Are FHA loans the answer for first-time buyers?

![Mortgage News: What The End Of The Foreclosure Ban Means For Homeowners](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F16fbc9cba35548fd899ee2a091e13f76)

<br>

Here’s a look at the latest developments in the mortgage market this week. 

<ul>
<li><strong>The foreclosure ban just ended. Here’s what it means for homeowners.</strong></li>
<li><strong>Bidding wars are cooling down, but prices are still hot</strong></li>
<li><strong>Mortgage rates linger near historic lows</strong></li>
<li><strong>FHA or Conventional—which loan is best for you?</strong></li>
</ul>

## The foreclosure ban just ended. Here’s what it means for homeowners.

On July 31st, the government ended its [federal moratorium on foreclosures](https://www.inman.com/2021/07/31/eviction-and-foreclosure-bans-end/ "external"), putting more pressure on homeowners in forbearance to catch up on missed payments. That number of owners has dropped by half since the pandemic began, now accounting for 2.1 million households. If you’re currently in a forbearance plan, or behind on payments, there are a few routes you can take to get on your feet and remain in good standing with your lender. 

Mortgage forbearance is a way to put your loan payments on pause with the approval of a lender or bank. When the period ends, homeowners are required to resume their monthly payments and make up the ones they missed, with interest. 

With [an FHA loan](https://better.com/content/what-is-an-fha-loan/) or federally funded mortgage, homeowners can extend forbearance plans for up to 18 months. If your mortgage falls in that category and you haven’t hit the limit, you could apply for a 3-month extension for more time. 

Selling your home could also provide the influx of cash required to start fresh. Over [a million homeowners were rescued](https://www.nationalmortgagenews.com/articles/u-s-housing-boom-rescues-more-than-1-million-underwater-homes "external") from debt in the last year and a half just by selling their home. If you’re ready to make the move, you may be able to list with [Better Real Estate](https://better.com/realestate) and pay less than you would with a traditional brokerage. 

With [today’s 30-year fixed rate near a historic low](http://www.freddiemac.com/pmms/ "external") and [millions in a good position to save](https://time.com/nextadvisor/mortgages/mortgage-news/do-you-qualify-to-save-on-refinance-loan/ "external"), refinancing may be the best option. A new home loan gives you the chance to reset your terms entirely, or lock in a lower interest rate and monthly payment. You could even tap into your home equity with a [cash-out refinance](https://better.com/content/cash-out-refinancing-gives-you-options/). Over the last year, home equity around the country rose by a record [$33,400 per homeowner](https://www.cnbc.com/2021/06/10/homeowners-got-2-trillion-richer-during-first-three-months-of-2021.html "external") on average. See [how to calculate your home equity](https://better.com/content/home-equity-vs-refinance/), and read through [our guide to refinancing](https://better.com/content/is-it-a-good-time-to-refinance) to learn if it’s the right move for you. 

No matter which direction you take, it starts with [seeing your rates](https://better.com/start). That way, you know where you stand as a homeowner—and what you could be saving. 

## Bidding wars are cooling down, but prices are still hot

With [more inventory](https://better.com/content/how-to-get-an-offer-accepted-in-todays-market) hitting the market, [bidding wars are on the decline](https://www.inman.com/2021/08/03/bidding-wars-are-cooling-off-how-to-prepare-for-a-shift-2/ "external") for the second month in a row, this time by [7% from May to June](https://www.redfin.com/news/real-estate-bidding-wars-june-2021/ "external"). That’s good news for shoppers who are dealing with tough competition, but with prices still at record highs, it may not be felt in every corner of the market. 

Existing home prices have jumped 23% over the last year, reaching a record median price of [$363,000](https://www.wsj.com/articles/median-existing-home-price-hit-new-high-in-june-11626963073#:~:text=June%20sales%20rose%2022.9%25%20from,price%20increases%20amid%20limited%20inventory. "external"). Even without a bidding war, making sure your offer stands out to sellers is important.. 

Boost your odds of an accepted offer with the [Better Appraisal Guarantee](https://welcome.better.com/better-appraisal-guarantee/).* It locks in your loan terms regardless of a home’s appraisal, so you don’t take any risk by waiving [the appraisal contingency](https://better.com/content/appraisal-contingency/). Sellers are 50%** more likely to pick a guarantee-backed offer, and all it takes to get started is talking to a Better Real Estate agent. [Find one in your area here](https://better.com/with/find-an-agent?leadSource=betterappraisalguarantee). 

## Mortgage rates linger near historic lows

The market drove mortgage rates down last week, due to a heightened sense of uncertainty around the pandemic and new variants. The [30-year fixed rate hit 2.77%](http://www.freddiemac.com/pmms/ "external") which is a 0.11% drop from where it was at this time last year. 

Rates this low spell good news for homebuyers and homeowners alike. And given how much closing costs can also impact the price of a loan, a no-cost mortgage could be a great way to save even more. This loan type rolls your closing costs into the total loan amount, so you don’t have to pay as much upfront. [Find out if a no-cost mortgage](https://better.com/content/no-cost-mortgage) is the right move for you. 

## FHA or Conventional—which loan is best for you?

Choosing a loan is about more than just what you qualify for. It depends on your priorities as a borrower, the kinds of risks you’re comfortable taking, and what you have planned for your homeownership timeline. FHA and Conventional loans are both popular, but come with different eligibility requirements, insurance costs, and availability. Find out which one is a better fit for you by following our [step-by-step guide to choosing between an FHA or Conventional loan type](https://better.com/content/fha-vs-conventional-loans). 

## Considering a home loan?

Get your custom rates in minutes with [Better Mortgage](https://better.com/). Their team is here to keep you informed and on track from pre-approval to closing. 

<br>

 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/start">See your rates</a>  
 </div>
<br><br>

<p class="legal"><a href="https://welcome.better.com/better-appraisal-guarantee/">*See Better Appraisal Guarantee terms and conditions</a> 
  <br> **Results based on a survey of 104 real estate agents in competitive markets. Of those surveyed, more than ~60% responded that waiving the appraisal contingency could increase the likelihood of having a competitive offer accepted by 50% or more. Results may vary and are not intended to represent or guarantee that anyone will achieve the same or similar results.</p>

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The foreclosure moratorium just ended, and 2.1 million homeowners are still in forbearance. Here are a few options to consider for getting up to date on payments. 

What The End Of The Foreclosure Ban Means

Blog post image for What the end of the foreclosure ban means for homeowners

What the end of the foreclosure ban means for homeowners

![Mortgage News 4/12/2021: Rates Took A Dip. Is It Time To Refinance?](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fe884754fe92348c89deb5124ee9f1828)

<br>

Here’s a look at the latest developments in the mortgage market for the week beginning 4/12/21. 

<ul>
<li><strong>Rates took their first dip in seven weeks. Is now the time to refinance?</strong></li>
<li><strong>More existing homes may hit the market as owners prepare to sell</strong></li>
<li><strong>Increased jumbo loan credit may signal flexibility for applicants</strong></li>
<li><strong>Is buying a home worth it? Here’s how to assess</strong></li>
</ul>

## Rates took their first dip in seven weeks. Is now the time to refinance?

Rates dropped for the first time in two months, with the average [30-year fixed rate falling to 3.13%](https://www.marketwatch.com/story/mortgage-rates-fall-for-the-first-time-since-february-but-dont-necessarily-expect-a-long-reprieve-11617890901 "external") last week, from 3.18% the week before. The market was likely reacting to [a recent Coronavirus spike](https://www.nationalmortgagenews.com/news/mortgage-rates-sink-as-coronavirus-concerns-flare-up "external"), which brought a sense of caution to the economy’s recovery. 

Otherwise, mortgage rates have been rising since January, and the number of homeowners choosing to refinance has gradually declined. Refinance applicants went from making up nearly three quarters of mortgage applications at [the end of 2020 ](https://www.mba.org/x275422.xml "external")to [60% of them today](https://www.mba.org/2021-press-releases/april/mortgage-applications-decrease-in-latest-mba-weekly-survey "external"). As a homeowner, should you rush to refinance during a dip like this?

While a lower-than-usual rate is always a benefit, the reality is, it’s a gamble to try and time the market to catch one. In fact, knowing when to refinance has less to do with how the market is moving and everything to do with your unique financial picture. 

There’s no cut and dry formula for knowing when to refinance, but the team at Better Mortgage follows a general rule of thumb that if an owner can lower their rate by .50%, it’s likely a financially sound move. So for example, if a $300,000 loan was financed at a 30-year fixed rate of 3.65%, its monthly payments (excluding insurance, taxes, and other costs) would be somewhere around $1,400. If the same loan can be refinanced at a rate of 3.15%, that owner could save at least $200 per month, or $2,400 by the end of the year.* 

Given that average rates for 30-year fixed mortgages were [consistently higher than 3.63%](http://www.freddiemac.com/pmms/ "external") before January 2020, a homeowner who first financed over a year ago is likely to save. With an even longer span of time between financing, or an even greater difference in rates, the potential for savings only grows—even when rates are rising. 

But it’s not just rates that make refinancing worthwhile. Homeowners can benefit from the process if they’re looking to consolidate other loans or debt, cash out some of their home equity, or reset the terms of their mortgage, especially with an improved credit score or loan-to-value ratio. Still on the fence? [Read up on how those scenarios](https://better.com/content/refinancing-with-rising-interest-rates/) can bring rewards. 

Regardless of the market, the goal of a refinance is to improve upon your current mortgage—and that depends on your personal finances and goals. [See how today’s rates measure up](https://better.com/preapprovals/refinance) with your current loan to see if there’s an opportunity for a better deal.

## More existing homes may hit the market as owners prepare to sell

After sitting at a record low for months, existing home inventory will likely get a boost thanks to many homeowners’ newfound comfort with selling. [One in seven homeowners](https://www.inman.com/2021/04/07/1-in-7-homeowners-considering-selling-within-next-3-years/ "external") said they’re considering selling their home within the next three years, and, of that, 41% are planning on selling in the next twelve months. Seller attitudes are aligned with the general public, as [61% of Americans](http://www.mortgagenewsdaily.com/04072021_national_housing_survey.asp "external") recently said it was a good time to sell a home. 

The shift in attitude may have been driven by the fact that more Americans are now vaccinated, making homeowners more comfortable with in-person tours. Many cited their desire to relocate, with [50% wanting an upgraded home](https://www.inman.com/2021/04/07/1-in-7-homeowners-considering-selling-within-next-3-years/ "external"), and 39% hoping to capitalize on buyer competition for the best price. 

More existing home listings may offer buyers some relief from the tension of low supply on the market, after March ended with [117,000 fewer listings](https://www.realtor.com/research/weekly-housing-trends-view-data-week-apr-3-2021/ "external") than the year before. While it may not be enough to lower competition and prices, new inventory may help [curb price growth](https://better.com/content/how-to-keep-costs-down-as-home-prices-rise/). 

## Increased jumbo loan credit may signal flexibility for applicants 

The credit supply for jumbo loans has increased by 1.5% in March, according to [the Mortgage Bankers Association](https://www.mba.org/2021-press-releases/april/mortgage-credit-availability-increased-in-march "external"). This comes within an uptick in overall mortgage credit, which means loans may be more widely available to applicants, and it spells good news for those looking to borrow more than their [conforming loan limit allows](https://better.com/content/jumbo-vs-conforming-loans/).

Given their higher totals, many lenders offset the risk of jumbo loans with stringent criteria, like higher down payments and credit scores. When loan credit increases, it means lending standards are likely loosening. In this case, [homebuying season has ramped up demand](http://www.mortgagenewsdaily.com/04082021_mba_mcai.asp "external") for jumbo loans, and the added supply may mean more flexibility for applicants with lower credit scores or higher loan-to-value ratios. 

## Is buying a home worth it? Here’s how to assess

Homeownership is both an upfront investment and an ongoing commitment, so if you’re on the fence, it’s worth taking a look at all the pros and cons before diving in. 

One of the biggest rewards of owning a home is equity. As you pay into the principal amount of your mortgage, or as your property value increases, you gain a larger portion of home equity. But it also takes an average of four years for home equity to cover a buyer’s upfront costs alone. So before committing, consider how long you plan to stay in your home, as well as your other financial needs and goals during that time. [This breakdown can help guide your decision](https://better.com/content/pros-and-cons-of-buying-a-house/) as you weigh the risks and benefits of homeownership.  

## Considering a home loan?

Get your custom rates in minutes at [Better.com](https://better.com). Our team is here to walk you through your options and help you make an informed decision about which loan is right for you. 

<br>

 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/start">See your rates</a>  
 </div>
<br><br>

<p class="legal">This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.</p>

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Mortgage News: While a recent dip in rates may provide homeowners savings, the truth is, shifts in the market shouldn’t determine when it’s time to refinance.

Rates Took A Dip. Is It Time To Refinance?

Blog post image for Rates took a dip. Is it time to refinance?

Rates took a dip. Is it time to refinance?

![Mortgage News 1/04/2021: Why 2020 Was the Year of the Home](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Ffbd69199dd804a1783589af2bfde3951)

<br>

Here’s a look at the latest developments in the mortgage market for the week beginning 1/4/21. 

<ul>
<li><strong>How Better Mortgage helped make 2020 the year of the home</strong></li>
<li><strong>More homeowners opt to defer or lower their payments amid financial struggles</strong></li>
<li><strong>Prices rise in middle America as buyers flee coasts</strong></li>
<li><strong>A guide to the underwriting process</strong></li>
</ul>

<h2>How Better Mortgage helped make 2020 the year of the home</h2>

To say that 2020 was a major year for homeownership would be an understatement. In the middle of a global pandemic, homes became more than just living spaces—they were offices, gyms, schools, creative studios, and more. Millions of people chose to buy or refinance in the last year, and Better Mortgage alone took on over 88,000 new clients, funding [over $20B in home loans](https://better.com/content/year-of-the-home-2020-review/). 

It was a historic year for interest rates. Due to intervention by the Federal Reserve, rates fell below previous records over a dozen times. Better Mortgage was able to offer competitive Market Rates, often lower than Freddie Mac PMMS rates, even as those benchmarks continued to drop.

<h4>Better Mortgage Market Rate* vs Freddie Mac Primary Mortgage Market Survey (PMMS) Rate** (July - December 2020)</h4>

![Graph: Better Mortgage 30 Year Fixed Rate vs Freddie PMMS 30 Year Fixed Rate](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fa702e93a14a5404d88b719d10913dec5)

<p class="legal">This is not a commitment to lend. Interest rates are for informational purposes only.  Details on rate calculations below.</p>  

Economic hardship has been felt everywhere since COVID-19 first emerged in the U.S. in late winter, putting [40 million people out of work by May](https://www.housingwire.com/articles/heres-what-mortgage-forbearance-looked-like-in-2020/ "external"). With interest rates low, many homeowners [took the opportunity to refinance](https://better.com/content/winter-may-be-the-best-time-to-buy-a-home/). Better Mortgage saved clients who refinanced an annual total of over $300M.*** 

On the flip side, the same year saw the demand for homes rise. Many [millennial first-time buyers entered the market](https://better.com/content/millennials-drive-home-sales/), contributing to a home buying boom. As sales rose, however, so did home prices. Better Mortgage met the need for an affordable, transparent home loan experience, and saved 2020 homebuyers an average of $8,200 over the life of the loan.****  

Looking ahead to 2021, the lasting impacts of the pandemic are expected to [keep interest rates low, with a gradual rise](https://better.com/content/expect-rates-prices-sales-to-rise-in-2021/) throughout the year. There is still plenty of time for loan applicants to take advantage though, especially before prices and sales are [expected to climb as the year goes on](https://better.com/content/housing-sales-likely-to-continue-to-climb/). 

(For more on how Better Mortgage impacted the homeownership landscape, check out our [Year in Review](https://better.com/content/year-of-the-home-2020-review/).)

<h2>More homeowners opt to defer or lower their payments amid financial struggles</h2>

Alongside a nationwide vaccine rollout and second economic stimulus package, [2.8 million homeowners ended the year in forbearance](https://www.housingwire.com/articles/black-knight-2020-ends-with-2-8-million-in-forbearance/ "external"). Due to the high demand, the FHA announced they’ve extended the deadline for single-family borrowers to request forbearance up until February 28, 2021. 

For a growing number of homeowners, refinancing may be a more financially viable alternative to forbearance. While forbearance is a short-term measure used to avoid defaulting or foreclosure, [refinancing is an opportunity to renegotiate](https://better.com/content/refinance-vs-forbearance/) the terms of a home loan.

In late December, refinance applications made up [three quarters of all mortgage applications](https://www.housingwire.com/articles/mortgage-applications-increase-for-second-straight-week/# "external"), driving a 124% increase from the same period last year.

<h2>Prices rise in middle America as buyers flee coasts</h2>

Extended work-from-home policies and a desire for more space and comfort [drove an urban flight trend in 2020](https://better.com/content/opportunities-rise-downtown-condo-prices-drop/), as families moved away from tech hubs towards suburbs and smaller cities. 

Now, prices in those historically affordable cities are rising. Mid-American areas like Pittsburgh, Austin, Cincinnati, Cleveland, are seeing [price gains 10% higher](https://www.cnbc.com/2021/01/04/covid-real-estate-home-prices-rise-faster-in-middle-of-us.html "external") than they were last year. 

The shift could result in better deals for buyers in traditionally high-priced coastal markets. For example, [the Bay Area has seen a slower price incline](https://www.mercurynews.com/2021/01/04/bright-outlook-for-bay-area-home-sales-prices-in-2021/ "external") compared with other cities, despite historically high home values. 

<h2>A guide to the underwriting process</h2>

Underwriting is one of the final steps of the loan process, essentially deciding whether or not a home loan is approved. It involves taking a close look at an applicant’s entire financial picture and paying attention to a series of established risk factors.[ Here’s a handy guide](https://better.com/content/underwriting-process/) to what underwriters look for, the documents needed, and a timeline of the process. 

<h2>Considering a home loan?</h2>

Get your custom rates in minutes at [Better.com](https://better.com/). Our team is here to walk you through your options and help you make an informed decision about which loan is right for you.

<br>

 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/start">See your rates</a>  
 </div>

<br><br>

 <p class="legal">*Better Mortgage Market Rates were calculated from an average of rates using the assumptions below to provide a representative offered interest rate for each month. Assumptions include: $200K, $300K, $400K, $500K loan amount; 30-Year Fixed purchase, 30-Year Fixed rate and term refinance; borrower with above average credit (i.e., FICO score of 760 or higher); loan-to-value ratio of 80%; subject property is a Single Family Residence; subject property is borrower’s primary residence; subject property is located in one of our six highest volume metropolitan statistical areas.</p>

 <p class="legal">**Freddie Mac PMMS Rates are the result of surveys to lenders on the rates and points for their most popular 30-year fixed-rate conventional mortgage products, and an origination-weighted average of lender responses. The survey is based on first-lien prime conventional conforming home purchase mortgages with a loan-to-value of 80 percent. This average is widely regarded as the industry standard tracker of mortgage rates week over week.</p>

  <p class="legal">***Annual savings in loan payments for each loan are calculated as the monthly principal and interest payment of the borrower’s prior mortgage less the monthly principal and interest payment on their new loan from Better Mortgage, multiplied by 12 (savings are incurred each month in a year). Individual savings could vary based on current market rates, property type, loan amount, loan-to-value, credit score, debt-to-income ratio and other variables.</p>

  <p class="legal">****The average lifetime savings estimate is based on a comparison of the average interest rate offered by Better Mortgage to prospective borrowers for a $322,000 30-yr mortgage against the Mortgage Bankers Association index from April 2019 to April 2020. Individual savings could vary based on current market rates, property type, loan amount, loan-to-value, credit score, debt-to-income ratio and other variables.</p>

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Mortgage News: 2020 changed the homeownership game, and its effects are still being felt as we head into the new year. 

Why 2020 Was the Year of the Home

Blog post image for Why 2020 was the year of the home

Why 2020 was the year of the home

![mortgage news 9/22](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F2b3bb0bf4bd24c0b800cbffa33ba0b22)

<br>

Here’s a look at the latest developments in the mortgage market for the week beginning 9/21/20. 

<ul>
<li><strong>Federal Reserve will keep interest rates near zero until 2023</strong></li>
<li><strong>Surging home demand drives homebuilder confidence to all-time high</strong></li>
<li><strong>Digital mortgage platforms found to reduce discrimination in lending</strong></li>
<li><strong>Remote work could add almost 2 million potential buyers to the market</strong></li>
  <li><strong>What to look for when comparing mortgage rates</strong></li>
  <li><strong>Better.com is Linkedin’s No.1 Startup of 2020</strong></li>
</ul>

<h2>Federal Reserve will keep interest rates near zero until 2023</h2>

Last week members of the Federal Reserve Open Market Committee (FOMC) released a new policy statement indicating their willingness to use the many tools at their disposal to support the nation’s [economic recovery](https://www.cbsnews.com/news/federal-reserve-interest-rate-flat-decision-today-2020-09-16/ "external"). Their focus included maintaining their benchmark rate at 0-.25% for at least three years and continuing to buy U.S. Treasury bonds and Mortgage Backed Securities (MBS) — both of which will support low interest rates and spur lending. While the benchmark rate is headline grabbing, it generally doesn’t affect [mortgage rates](https://better.com/content/why-your-mortgage-rate-isnt-really-affected-by-the-feds-rates/). The buying of MBS, however, has the clear goal of attempting to keep mortgage rates low. 

Though the move indicates a need for ongoing economic support, the Federal Reserve believes that the economy will recover much faster than originally anticipated. The nation’s unemployment rate which is now at 8.4% is now expected to drop to 7.6% by the end of year, before ultimately reaching 4% in 2023. 

According to Federal Reserve Chair Jerome H. Powell, the [path to recovery](https://www.federalreserve.gov/newsevents/testimony/powell20200922a.htm "external") relies heavily on effective COVID-19 containment measures and financial support from all levels of government. In the meantime, the Federal Reserve will continue to use all of its resources to boost the economy for the foreseeable future. 

<h2>Surging home demand drives homebuilder confidence to all-time high</h2>

Despite uncertainty in the nation’s economic recovery, the housing market is rebounding and flourishing. The median home price [increased 13%](http://redfin.com/blog/late-summer-housing-demand-strong/ "external") from 2019 to $319,261, while pending home sales were up 27% compared to the same time last year. These indicators point to a great deal of pent-up demand chasing a small amount of inventory. As a result, the National Association of Home Builders (NAHB) and Wells Fargo Housing Market Index (HMI) [rose by five points to 83](https://nahbnow.com/2020/09/builder-confidence-soars-to-an-all-time-high-lumber-risks-remain/ "external"), beating the previous record of 78 reached last month. The index measures builder confidence in the market for newly built single-family homes and sales expectations for the next six months on scale from zero to 100.

While a delay remains between homebuilding and new inventory, home values may continue to [appreciate](https://better.com/content/high-demand-low-supply-for-suburban-homes/), especially in areas outside major metros where [millennials are moving](https://better.com/content/fhfa-extends-foreclosure-suspension/). 

<h2>Digital mortgage platforms found to reduce discrimination in lending</h2>

The traditional mortgage process has always been fraught with hurdles, and for those who don’t fit the stereotypical homeownership mold—white, married, heterosexual—the obstacles have been proven to be far greater. In 2019 alone, prospective African-American and Hispanic homebuyers were denied mortgages at [16% and 11.6%](https://www.nytimes.com/2020/09/18/business/digital-mortgages.html?referringSource=articleShare "external") respectively, compared to only 7% of white Americans. Within the LGBTQ community, one [study](https://www.pnas.org/content/116/19/9293 "external") found that couples were 73% more likely to be denied a mortgage than heterosexual couples with comparable financial credentials. 

There is a clear need to democratize the mortgage industry, and online mortgage lenders are offering a shift in the right direction. By allowing prospective homebuyers to upload their financial information, get a letter of approval, and search for interest rates without an in-person meeting, these digital platforms can effectively bypass human bias. In fact, algorithms were found to discriminate [40% less](http://faculty.haas.berkeley.edu/morse/research/papers/discrim.pdf?_ga=2.161360829.1884437453.1583517590-1779220203.1578413279 "external") on average than in-person lenders. 

Trends like these are one of the reasons that Better Mortgage remains committed to technological innovation and fair lending practices. We have long believed that such measures are a crucial part of our mission to make homeownership accessible for all.

<h2>Remote work could add almost 2 million potential buyers to the market</h2>

Almost 2 million renters may now be able to [become homeowners](https://www.zillow.com/research/telecommute-2-million-buyers-27866/ "external") as more companies introduce work-from-home policies nationwide according to a Zillow analysis. Renter households that have the ability to work remotely, but can’t afford entry-level homes in their current metro areas, could potentially buy starter homes [in less expensive markets](https://better.com/content/remote-workers-flock-to-zoom-towns/). 

For example, almost a quarter million renters in the San Francisco and San Jose metro areas alone would have the means to own homes in other locales if telecommuting was an option. For prospective buyers interested in making a move, Zillow identified Pittsburgh, El Paso, and Rochester as the three most [affordable places](http://zillow.mediaroom.com/2020-09-08-Remote-Work-Could-Open-Homeownership-to-Nearly-Two-Million-Renter-Households "external") to buy a starter home.

<h2>What to look for when comparing mortgage rates</h2>

Rate tables are one of the most important mortgage comparison tools available to borrowers during their search for home financing. Typically found on a lender or mortgage rate comparison website, a rate table provides key information about a lender’s mortgage products, rates, and estimated monthly payments for a home. Our team of experts put together a guide to demystify rate tables and [what to look for when comparing mortgage rates](https://better.com/content/what-to-look-for-when-comparing-mortgage-rates/).

<h2>Better.com is LinkedIn’s No.1 Startup of 2020</h2>

LinkedIn just released its [annual list of 50 Top Startups](https://www.linkedin.com/pulse/linkedin-top-startups-2020-50-us-companies-rise-jessi-hempel/?published=t "external"), and Better.com took first place. Recipients were judged on employee growth, job seeker interest, member engagement with the company and its employees, and ability to attract top talent.

<h2>Considering a home loan?</h2>

Get your custom rates in minutes at [Better.com](https://better.com/). Our team is here to walk you through your options and help you make an informed decision about which loan is right for you.

<br>

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 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/start">See your rates</a>  
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Mortgage News: The Federal Reserve intends to keep interest rates near zero in an effort to speed economic recovery.

Federal Reserve to Keep Rates Near Zero until 2023

Blog post image for Federal Reserve plans to keep rates near zero until 2023

Federal Reserve plans to keep rates near zero until 2023

![mortgage news 9/7/20](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Ffe09d37a6fbf4512a7fa3e365178ef75)

<br>

Here’s a look at the latest developments in the mortgage market for the week beginning 9/07/20.

<ul>
<li><strong>  Remote work shows no signs of slowing down as “Zoom towns” spring up</strong></li>
<li><strong>Rates return to record lows after FHFA announced fee delay</strong></li>
<li><strong>Median home price hits new record nationwide</strong></li>
<li><strong>How property occupancy can affect your mortgage</strong></li>
<li><strong>Business Insider named Better.com CEO among 100 People Transforming Business</strong></li>
</ul>

<h2>Remote work shows no signs of slowing down as “Zoom towns” spring up</h2> 

Vacation destinations and resort towns throughout the country once reserved for affluent travelers escaping the pandemic are experiencing a steady influx of remote workers. As waves of people move to these “[Zoom towns](https://www.bloomberg.com/opinion/articles/2020-08-05/remote-work-from-resort-towns-eases-housing-costs-in-big-cities "external")” or areas where remote work is booming, home prices in those communities have skyrocketed. 

This trend aligns with the larger housing boom that’s currently playing out in the market. Record low interest rates, millennials reaching homebuying age, and people fleeing cities for more space have all added to the housing demand surge. 

Data from Better Mortgage supports the mass exodus from apartments in major cities to more space and affordability in the suburbs. In New York City, 35% of Better applicants bought homes in counties outside the five boroughs in July, while 27% of applicants from the San Francisco Bay Area bought homes outside the area. 

The tremendous move to resort communities and suburbs could also help offset housing costs for buyers and renters interested in major cities, as prices in those areas [may decline](https://wolfstreet.com/2020/08/03/rents-swoon-in-san-francisco-other-expensive-cities-and-tx-ok-oil-patch-y-y-but-23-cities-with-red-hot-double-digit-rent-increases/ "external"). This potential affordability can help homebuyers who were previously unable to buy in urban areas the opportunity to finally make a move. 

<h2>Rates return to record lows after FHFA announced fee delay</h2> 

Homeowners looking to take advantage of record-low interest rates were met with a surprise when the Federal Housing Finance Agency (FHFA) announced [a 0.5% refinance fee](https://better.com/content/fhfa-pushes-refinance-fee-to-december/) on all mortgages in mid-August. As soon as the announcement was made, interest rates began to increase. After backlash from mortgage industry leaders and the federal government, the FHFA decided to delay the fee until December. This change caused the average 30-year fixed rate to hit its [lowest level](https://www.fool.com/the-ascent/mortgages/articles/mortgage-rates-plunge-after-refinance-fee-delayed-borrowers-may-want-act-fast/ "external") since early August. 

While the fee’s delay granted borrowers time to save on monthly rates, those interested in taking advantage of record-low rates, shouldn’t wait too long to begin the process. Many lenders will adjust their pricing to include the fee before December, so refinancers are encouraged to lock in a rate soon to be on the safe side.

<h2>Median home price hits new record nationwide</h2>

The housing market continues to soar to new heights as the national median listing price hit $350,000 in August—[a new record](https://money.yahoo.com/frenzied-buyer-demand-low-inventory-100000455.html?guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAADwMjlas4H28ZbNNZMCBCMQQ59Y71rFA4EvSygveY2eHPzNj1GdQ3Togu-MSj3-qNx5x3xPLWiZ-_oEwAi8HMl4eULCRQ0dAgIhyPmSQBBwSMK8lbUPMHnvFZbW-Ty-XyPk4ymLngE-e2OPEHDeKRARaK7KE9O4-gvgLL7k4T335&guccounter=2 "external"). This comes as a result of strong homebuyer demand and low inventory nationwide. There were [500,000 fewer homes available in the market](https://www.forbes.com/sites/ellenparis/2020/09/05/heres-the-latest-housing-market-news-from-realtorcom/#3755911a49bf "external") at the end of August, compared to the same time last year. 

As homes in the market sell at their fastest pace in 15 months, it’s important for homebuyers to stand out against the competition bidding in the same pool of homes. Having a [pre-approval letter](https://better.com/content/what-is-a-mortgage-pre-approval/), which provides proof of purchasing power, lets a seller know that a buyer is serious and can make a significant difference in a crowded home marketplace.

<h2>How property occupancy can affect your mortgage</h2> 

When applying for a mortgage, the intended use of the property plays a larger role than many homebuyers might think. A primary residence is viewed differently by lenders than a second home or an investment property because the level of risk involved varies for each. 

We’ve outlined the [differences between each property type](https://better.com/content/primary-residence-second-home-or-investment-property-whats-the-difference/) and how their intended use can impact borrowers.

<h2>Business Insider named Better.com CEO among 100 People Transforming Business</h2>

Business Insider released its annual 100 People Transforming Business list, which recognizes innovators driving change in their companies and industries. This year, Better.com’s CEO, [Vishal Garg](https://www.businessinsider.com/tb/the-list-of-300-people-transforming-business-in-2020-9/transformers/vishal-garg), made the cut. 

He was recognized as one of the top 10 leaders in the finance category, joining CEOs from major institutions such as Bank of America and Goldman Sachs.

<h2>Considering a home loan?</h2>

Get your custom rates in minutes at [Better.com](https://better.com/). Our team is here to walk you through your options and help you make an informed decision about which loan is right for you.

<br>

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Mortgage News: Vacation destinations nationwide are turning into "Zoom towns" as remote workers flee cities and move there in waves

Remote Workers Flock to “Zoom Towns”

Blog post image for “Zoom towns” spring up in vacation destinations as workers go remote

“Zoom towns” spring up in vacation destinations as workers go remote

![mortgage news 5/4/20](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F29e935c6f40e4de08cd9cdbc6253a5e8)

<br><br> 

Here’s a look at the latest developments in the mortgage market for the week beginning 5/4/20. 

<ul>
<li><strong>“Safe investments” returns lower than ever, real estate returns rise</strong></li>
<li><strong>Consumer confidence suffers historic drop, outlook optimistic
</strong></li>
<li><strong>Fed moves to make more credit available to consumers</strong></li>
</ul>

<h2>Returns on “safe investments” lower than ever, as real estate returns rise</h2>

Americans are saving at a higher rate, but with significantly lower returns. On average, Americans are now [putting away 13.1%](https://www.bea.gov/data/income-saving/personal-saving-rate) of disposable income, up from just 7.7% in January of this year. Because of perceived riskiness in the financial markets, they are opting for traditionally safer investments like bonds, money market funds, and bank deposits. For example, [cash deposits at JP Morgan were up 39%](https://www.jpmorganchase.com/ir) in the first quarter of this year. 

Unfortunately, savers are seeing [less return than ever](https://www.fdic.gov/regulations/resources/rates/) on these types of investments. Due to the low Federal Funds rate, bank deposits are paying an average annual return of 0.07%, and money market funds are not much higher, averaging around 0.1%. With analysts predicting rates could stay extremely low for [several years](https://www.cnn.com/2020/03/17/investing/federal-reserve-interest-rates-coronavirus/index.html), Americans inclined toward long-term investments are faced with the prospect of diminished returns over time.

Real estate, on the other hand, is one form of investment that tends to pay off post-recession. Even in the wake of 2008’s housing crash, the average home sales price [increased over 40%](https://fred.stlouisfed.org/series/ASPNHSUS) over the past decade (a 3.5% annual growth rate) — making the current average 87% higher than it was twenty years ago. While financial assets are seeing record volatility, home prices [are not expected to decline as much](https://better.com/content/mortgage-news-4-27-20-covid19-pandemic-home-prices/) as they did in 2008, and Americans who are able to sell their homes are generally  still seeing [increases in profits](http://www.mortgagenewsdaily.com/05012020_homeownership.asp). 

<h2>Consumer confidence suffers record drop in April</h2>

With unemployment [expected to reach up to 15%](https://www.marketwatch.com/story/millions-of-lost-jobs-may-push-unemployment-rate-to-highest-since-great-depression-2020-05-02), and non-essential businesses closed nationwide, the [Consumer Confidence index](https://www.conference-board.org/data/consumerconfidence.cfm?mod=article_inline) saw its largest ever drop in April. 

While current conditions are causing concern, consumers appear to be optimistic about the near future. The Expectations Index, which measures consumers’ short-term economic outlook, [rose from 86.8 to 93.8](https://www.conference-board.org/data/consumerconfidence.cfm). The percentage of respondents expecting job creation over the next six months, as well as the share who believe business conditions will improve both *doubled* from March to April. Amidst continued uncertainty regarding [COVID-19’s impact on the economy](https://better.com/content/mortgage-news-4-20-20/), however, these numbers are expected to fluctuate in the coming months. 

<h2>Federal Reserve moves to make more credit available to consumers</h2>

The Federal Reserve has committed to buying [as many Mortgage-Backed Securities as it takes](https://better.com/content/mortgage-market-news-3-23-20-federal-reserve-actions-drop-mortgage-rates/) for the mortgage market to function throughout the crisis, which has the effect of pushing down rates. Many borrowers, however, aren’t seeing [lower mortgage rates](http://www.mortgagenewsdaily.com/mortgage_rates/blog/943349.aspx) as a result of the Fed’s actions.

Bracing for the impact of the second wave of forbearance, lenders are still cautious of lowering rates for anyone but the most creditworthy borrowers. With individual lenders and servicers worried about having the cash to forward payments to mortgage investors, the Federal Housing Finance Agency (FHFA) clarified some policies around forbearance. In his comments, the head of the FHFA mentioned the ease of servicing transfers, indicating the possibility of allowing some servicers to fail. In response, some lenders [tightened their credit standards](https://www.housingwire.com/articles/pulse-david-stevens-fhfa-actions-resulted-in-unprecedented-tightening-of-credit/). This has involved discontinuing some cash-out refinance loans, instituting 700 FICO floors, eliminating non-conforming loan programs, and placing restrictions on some jumbo loans. With [7.5% of all loans currently in forbearance](https://www.nationalmortgagenews.com/news/distressed-job-market-pushes-mortgage-forbearance-requests-higher), and Fannie Mae expecting that number to double, it may be awhile before lenders are comfortable loosening their credit standards. If this is the case, the record-low rates lenders are advertising may only be available to the least risky applicants. Despite these hurdles, borrowers are still taking advantage of the low rate environment; the volume of refinance applications last week was [three times as high](https://www.marketwatch.com/story/mortgage-rates-fall-to-new-record-low-heres-why-some-loan-applicants-wont-be-offered-them-2020-04-30) as this time last year.

Better Mortgage is currently lending to qualified customers with credit scores as low as 620. Get pre-approved in minutes, and see your rates instantly at Better.com. 

<br>

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Amidst a record drop in consumer confidence, and low returns on traditionally safe investments, the Fed moves to make more credit available to consumers. 

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