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News & Insights | Mortgage News

 ## Rising (inventory) tides lift all ships 

![Illustration of character looking through magnifying glass at a home](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fc8a3b7eabd704e60ba7b499a9ad05d5a)

For the past two years, homebuying has felt like a mad dash with seemingly endless waves of eager buyers rushing to submit offers and homes getting snatched off the market within hours of being listed. But there are indications that this sprint is shifting to a marathon. Today, the slow-and-steady mentality may serve you best. Buyers who can outlast and outsmart the competition could be crossing the finish line having expended less money and effort. Here’s how:

__1. Scroll smarter, not harder.__ 

As you thumb through online listings, keep an eye out for houses that have been active for at least 30 days. Make a list of your favorites and set an alert for these properties. As more inventory floods the market, sellers who aren’t seeing competitive offers are likely to get antsy. 

__2. Keep an eye on your alerts.__ 

Once you have your list of homes to watch, stay tuned in to the activity. Sellers will typically be advised to lower their prices after a month, especially if the original number wasn’t on par with the rest of the market to begin with; a 5%-10% price cut isn’t unusual in these situations. That kind of drop could put a home that was previously out of reach into the “affordable” range of your budget. 

__3. Be the tortoise, not the hare.__

Remember, market shifts are taking place but they likely won’t happen all at once. Not seeing price drops in your area? Consider windeing the parameters of your search (if you’re able) and going where the dips are. Some cities like Detroit, Memphis, Los Angeles, and Chicago are already seeing median list prices decline.2 If that’s not an option, channel your inner tortoise and bide your time. The right sheller—ahem, seller!—could be just around the corner. 

<br>

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<br><br> 

## How low should you go in limbo listing? 

![Illustration of home in hand with percentages in the background](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fe3dffaa15bee44949d2f14972cba32c1) 

Last week we cautioned that panic-pricing, or impulsively reducing the list price on your home without a strategy in mind, could put you on the fast track to selling yourself short. It’s a warning that bears repeating as the market continues to shift this week. Yes, there’s an uptick in active listings and some buyers are backing off their search altogether thanks to rising interest rates—but sellers still have an advantage in most areas: overall competition, though diminishing slightly from record highs, remains fierce. And while price reductions are likely part of this new reality for sellers, you can still be smart about the process and get the most value for your home. 

If you notice prices starting to decline in your neighborhood, consider how urgent your timeline is. If you need to sell your house fast and aren’t getting any bites in the first 10 days, a significant drop in the listing price of your home could generate buyer attention and help move the process along. If you have a bit more time, you can likely afford to start with an incremental drop and hope that motivated buyers start to nibble. 

Either way, it’s helpful to determine your lowest number ahead of time and build a strategy based on that figure. Keep in mind that there are costs associated with selling any home, so when reducing your price you should account for things like taxes and agent fees—after all, you still want to make as big a profit as possible. When you work with a Better Real Estate Agent, you pay a 0% listing fee. Our agents also don’t charge commission, which is typically the biggest cost that sellers have to pay in a real estate transaction.

### List for free with Better Real Estate 
When you work with a Better Real Estate Agent, you pay a 0% listing fee. Our agents also don’t charge commission, which is typically the biggest cost that sellers have to pay in a real estate transaction.

<br>

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<br><br> 

## The beginner’s guide to beating buyer’s remorse

__TL;DR? Equity gives you options—find out how much you have and use it to help plan your next steps.__

During the height of the housing boom, thousands of excited buyers took the plunge and became homeowners. Along the way, many made compromises on their homebuying wish lists, waived contingencies, participated in bidding wars that hiked up purchase prices, and closed on accelerated timelines. When the dust settled, some or all of these factors may have contributed to a sense of regret about the transaction. 

If this is you, dear reader, fear not! Although buyer’s remorse is a bitter pill to swallow, equity might be the spoonful of sugar you’ve been craving. Home equity is the difference between how much you owe on your mortgage and how much your home is worth on the market. You gain home equity in two ways: by paying down your loan or when your property value goes up. The fact that housing prices have been on a steady upward trend (the median listing price grew by 18.2% over the last year3) means your home is likely worth more now than when you bought it. And the equity you’ve built since then could help you buy your next home.

As the market continues to become more favorable for buyers, homeowners looking for an out on their current home might get a considerable budget boost from this earned equity when they make their next move. And for those who aren’t quite ready to sell, there are [other ways to leverage equity](https://better.com/content/home-equity-vs-refinance/) that can help pay off debt or fund other financial goals like building up savings or paying for college tuition. 

#### 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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<br><br>
<p class="legal">This newsletter does not constitute an endorsement or recommendation of Better Mortgage Corporation; Better Real Estate, LLC; Better Cover, LLC; Better Settlement Services, LLC; or their services. Better Cover is solely responsible for homeowners insurance services. Better Mortgage is solely responsible for making all credit and lending decisions with respect to mortgage loans.</p>

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Hitting homebuyer stride, going low in listing limbo, and beating buyer’s remorse

Hitting homebuyer stride, going low in listing limbo & beating buyer’s remorse  

Blog post image for Hitting homebuyer stride, going low in listing limbo, and beating buyer’s remorse  

Hitting homebuyer stride, going low in listing limbo, and beating buyer’s remorse  

![The FYI on the ROI of a future rental property ](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F5cc2dadc8fac426fbc9eb7ebe16cab1f)

<br>

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

## Finding the right rental property 

![Finding the right rental property](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Faf928adc99cd425cb926c4a73fc75aac)

<p class="legal">Source: <a href="https://ipropertymanagement.com/research/real-estate-roi#residential-real-estate"> iProperty Management </a> </p>

If you’re looking to buy a property to rent out, should you buy a fixer-upper or a move-in ready home? It all boils down to your return on investment (ROI). 

__[A good ROI](https://www.forbes.com/sites/forbesrealestatecouncil/2021/05/28/how-to-calculate-the-roi-on-a-property-investment/?sh=2c5c5134dee4 "external")__ for a rental property is typically more than 10%, but 5%–10% can also be acceptable. But the ROI may be lower in the first year, due to the upfront costs of buying a home. 

__A fixer-upper may offer more upfront savings__ as their average list price is [25%](https://porch.com/advice/fixer-upper-capitals-study "external") lower than turnkey homes. 

Homeowners looking at a [29.3%](https://www.corelogic.com/intelligence/homeowner-equity-insights/#:~:text=Homeowner%20Equity%20Q4%202021,of%2029.3%25%20year%20over%20year. "external") year-over-year increase in home equity can __use a cash-out refinance to pay for their first investment property.__

## How to buy the right rental property

👀 __Look for a home with your ideal tenant in mind.__ Know how much rent they would want to pay and what they expect from a home. 

✍__Use an [ROI calculator](https://www.turbotenant.com/rental-property-calculator/ "external")__ to make sure the home you’re considering will likely generate the profits you’re after.

☔__Prepare an emergency fund.__ You’ll need to be ready to cover the cost of repairs, ongoing maintenance, or lost rent when the home is vacant. 

<br>

## 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. 

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

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<br><br>
<p class="legal">This newsletter does not constitute an endorsement or recommendation of Better Mortgage Corporation; Better Real Estate, LLC; Better Cover, LLC; Better Settlement Services, LLC; or their services. Better Cover is solely responsible for homeowners insurance services. Better Mortgage is solely responsible for making all credit and lending decisions with respect to mortgage loans.</p>

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Need the tools to find the right rental property for you? It all comes down to how to think about your return on investment.

The FYI on the ROI of a future rental property 

Blog post image for The FYI on the ROI of a future rental property

The FYI on the ROI of a future rental property

![Trend Report: Rates are set to rise, so get ready to make your move](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F361b0520047c4c5f82db639e17aad8ac)

<br>

January's need-to-knows:

<ul>
<li><strong>Buying in the suburbs? Brace for hot competition</strong></li>
<li><strong>2022 Housing Market Forecast for Homeowners</strong></li>
<li><strong>Local spotlight: Dallas, Texas</strong></li>
<li><strong>Monthly roundup</strong></li>
</ul>

## Buying in the suburbs? Brace for hot competition

According to a new [report from Realtor.com](https://www.realtor.com/research/urbanicity-2021/), suburban housing demand continues. Since the onset of COVID-19, the number of suburban homebuyers has surged 42.1%. This number includes both first-time homebuyers and current homeowners trading urban condominiums for single-family homes with backyards and good school districts. While suburban housing is still relatively affordable compared to more expensive urban areas, homebuyer demand is shrinking the difference in home prices to just 7%, down from 10% in 2019. 

“The suburbs have always [attracted homebuyers looking for more house for their money](https://www.realtor.com/research/homebuyers-seek-versatile-homes-2021/), but recent data reflects just how much suburban competition has intensified. With the rise in long-term remote work options and [downtown rents making a rapid comeback](https://www.realtor.com/research/september-2021-rent/), suburban vs. urban housing dynamics are shifting,” said Realtor.com Chief Economist Danielle Hale in a statement. “Buyers can still get more bang for their buck in the suburbs, but affordability is increasingly a consideration in many markets. As the COVID-19 recovery continues and [U.S. home prices remain near record-highs](https://www.realtor.com/research/october-2021-data), whether the suburban vs. urban gap in housing costs keeps closing will be an important factor to watch.”

<br>

![Bar Graph: Suburban vs Urban Housing Growth (September 2020 vs September 2019)](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F68bbfd803399464685adf4787a3d8c29)

<p class="imagecaption">Source: <a href="https://www.realtor.com/research/urbanicity-2021/">Realtor.com</a></p>

<br>

#### Buyer advice 

- To buy in the suburbs, [work with a real estate agent](https://better.com/with/find-an-agent) who has experience in suburban markets.
- Cast a wider net for homes: [Move some items from your “need-to-have list” to your “nice-to-have list.”](https://better.com/content/how-to-know-if-a-house-is-right-for-you/)

Better Real Estate Agent Deborah Rubio of Houston, Texas, has some advice for first-time homebuyers who are looking to buy in the suburbs, “Hone in on a specific area.” 

![Pull Quote From Better Real Estate Agent Deborah Rubio: “Work with an agent who is willing to knock on doors or send postcards to the neighborhood you want to buy into.” ](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F5bb48d64ced141818d0a3229cb4e0e6c)

“Outside-the-box thinking is a must for your agent to connect you with a home before it even hits the market,” continues Rubio. “Establish a good relationship with your lender. If you use Better Mortgage, you can adjust your pre-approval amount from the convenience of your phone and be ready to place an offer as soon as you find ‘the one.'” 

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<br>

## 2022 Housing Market Forecast for Homeowners

Homeowners who have considered selling yet held off for various reasons—including COVID-19 and affordability concerns for their next home—may want to consider a strategic reboot in 2022.   

The number of homes for sale around the country recently hit an all-time low, while home prices hit [an all-time high](https://www.redfin.com/news/november-new-low-for-home-inventory/). In the latest housing market news from Redfin, the seasonally adjusted number of homes for sale fell 18% year over year in November, sending the median sale price up 15% to $383,100. Homes sold quickly as “it became even more common for homes to find buyers in a week,” Redfin reported. Homebuyers are looking and ready to pull the trigger. With less competition than ever, the chances of selling your home quickly and at a premium price are good. 

According to a recent [Home Value & Sales Forecast from Zillow](https://www.zillow.com/research/home-values-sales-forecast-oct-2021-30306/), home sales activity is expected to get stronger in the near and longer terms. Zillow predicts home values to grow 13.6% between October 2021 and October 2022.

![Pull Quote From Senior Associate of Capital Markets at Better Mortgage Brendan Phillips: “Rates will rise in 2022, likely slowly and steadily as the economy emerges from the other side of the pandemic.” ](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Ff93f3dddef554ad6b27c239958de909b)

This historic housing boom for sellers will likely have an expiration date. The Fed recently pivoted on [three possible interest rate hikes in 2022](https://www.cbsnews.com/news/fed-interest-rate-annoucement-what-to-expect-2021-12-15/), so selling sooner rather than later should be top of mind. As interest rates inch up, the pool of homebuyers is declining. 

Markets change quickly. If you're considering selling, now might be the time to move forward. 

#### Homeowner Advice

Set up a virtual or in-person appointment with a Better Real Estate Agent to see real-time sales prices for homes in your area and receive a free, no-obligation Competitive Market Analysis (CMA) on your home.

## Local spotlight: Dallas, Texas

![Spotlight Banner: Adam Kappel, Better Real Estate Agent from Dallas, Texas](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Feab3cf4fba30461c80198936fd96ac0e)

“In Dallas, the inventory of homes for sale is significantly down, reflecting many other markets around the country,” says Adam Kappel, a Better Real Estate Agent in Dallas, Texas. “We had 8,580 new listings in November 2021 compared to 13,114 new listings in July of 2021.” That’s good news for sellers. “Based on my experience, well-priced homes are getting offers in 2–3 days and going under contract shortly after. Across the entire [MLS](https://www.nar.realtor/nar-doj-settlement/multiple-listing-service-mls-what-is-it#:~:text=REALTORS%C2%AE%20have%20spent%20millions,to%20other%20real%20estate%20brokers.), we’re seeing homes stay on the market for about 5–8 days. A good portion of that time is likely spent calling for buyers’ highest and best offers and setting a deadline for those offers to be submitted,” Kappel adds. 

<br>

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 ## Monthly roundup

 #### 🪙 Flip for thought—Selling your home this winter

__Pro__ Listing as soon as possible can help you attract a larger pool of buyers before interest rates go up.  
__Con__ If you’re planning to buy after you sell, interest rate hikes may impact your home buying dollar.

[Learn more about buying and selling at the same time](https://better.com/content/buying-and-selling-a-home-at-the-same-time/)

#### 💰 Fund Fact 

Lucky sevens? According to a 2018 survey, homeowners in Las Vegas typically stay in their home for a little under 7 years. 

#### 🤓 What everyone’s reading 
[The FHFA raised the cap on conforming loans](https://better.com/content/fhfa-raised-cap-on-conforming-loans)

<br>

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With mortgage rates on the rise and suburban competition heating up, discover smart strategies to navigate today’s dynamic and fast-moving housing market.

Trend Report: Rates Are Set To Rise, Get Ready To Make Your Move

Blog post image for Rates are set to rise, so get ready to make your move

Rates are set to rise, so get ready to make your move

![Mortgage News: The FHFA Raised The Cap On Conforming Loans](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fab02cf96359347bba83da0147b18cef1)

<br>

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

## New loan limits should help buyers keep up with rising home prices 

If you’re shopping for a home, you know today’s prices are higher than they have been in years. The median price of an existing home rose [13% year-over-year](https://www.cnbc.com/2021/11/22/home-sales-rose-in-october-as-investors-rushed-into-the-market.html) in October to [$353,900](https://www.cnbc.com/2021/11/22/home-sales-rose-in-october-as-investors-rushed-into-the-market.html). One way buyers keep up with rising prices is to borrow more from lenders, which is how the country’s average purchase loan amount rose all the way to [$407,200](https://www.mba.org/2021-press-releases/november/mortgage-applications-increase-in-latest-mba-weekly-survey-x287934) in November. 

The [Federal Housing Finance Agency](https://www.fhfa.gov/DataTools/Tools/Pages/Conforming-Loan-Limit-Map.aspx) just announced new limits to how much buyers can borrow in a conforming loan. These limits are based around national average home prices, and differ from county to county. The loan limit for a single-family home used to start at $548,250 and now starts at [$647,200](https://www.fhfa.gov/DataTools/Tools/Pages/Conforming-Loan-Limit-Map.aspx). In more expensive markets, it peaked at $822,375, but will now jump to [$970,800](https://www.fhfa.gov/DataTools/Tools/Pages/Conforming-Loan-Limit-Map.aspx)—more than $100,000 higher.

The jump is part of a market shift towards more expensive homes and larger mortgages. But buyers may find it easier to compete with more wiggle room in what they can borrow. [Rates are still low](http://www.mortgagenewsdaily.com/consumer_rates/991897.aspx) compared to pre-pandemic levels, so a larger loan may not cost as much as you think. 

![Graph: Better Mortgage Monthly Average Purchase Loan Amounts](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F59d733c57a7c424380de1e8be47e4405)

If the home you’re buying requires more than your local conforming loan limit allows, it may be time to explore a jumbo loan. These come with slightly stricter eligibility requirements, so [read up on the differences between jumbo and conforming loans](https://better.com/content/jumbo-vs-conforming-loans/) to figure out what’s best for you.  

## How a cash-out refinance can help you with your outstanding debt

Homeowners have [$9.1 trillion](https://www.forbes.com/sites/kathleenhowley/2021/11/08/americans-cashing-out-home-equity-after-record-gains-in-value/?sh=346c32592005) of home equity available to them, and [33% more](https://www.forbes.com/sites/kathleenhowley/2021/11/08/americans-cashing-out-home-equity-after-record-gains-in-value/?sh=346c32592005) are choosing cash-out refinances to tap into it. This refinance can provide cash for investments like home improvements or tuition, but did you know it can help you consolidate your debt?

Cash-out refinancing involves taking out a new mortgage for more than you currently owe, and keeping the difference in cash. When it comes to debt consolidation, a cash-out refinance can mean borrowing enough to wipe out your existing debt, so that you only have one loan—often with a lower interest rate—to pay off over time.

Many homeowners are up to date on their mortgage but behind in other credit lines, like student debt or credit cards, especially after financial challenges brought on by the pandemic. The average American household [owed about $92,727](https://www.experian.com/blogs/ask-experian/consumer-credit-review/) in 2020, and [42% of adults with credit card debt](https://www.cnbc.com/2021/09/27/42-percent-of-americans-have-increased-their-credit-card-debt-during-covid-19.html) have seen it increase since last spring. 

Want to see if a cash-out refinance can help with your debt? Take a few minutes to [get pre-approved with Better Mortgage](http://better.com/start) and see how much home equity you have. And read more about [all the ways a cash-out refinance can help you](https://better.com/content/cash-out-refinancing-gives-you-options/).

## Ask a Better Mortgage Home Advisor: When should I lock my rate?

![Image of Alliyah Khan Framed by Green Rectangles](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F2900faacfd0c41c68794f08a1b546855)

*[Getting pre-approved with Better Mortgage](http://better.com/start) sets you up with a licensed Better Mortgage Home Advisor. These loan experts are your single point of contact through every step, from pre-approval to closing. Here’s a preview of their guidance to help you better understand today’s market.*

*Alliyah Khan (NMLS 1910437) is a Senior Home Advisor based in New York City. She helps buyers in over a dozen states find the perfect mortgage for their new home, move through the process seamlessly, and close on time. What does she love most about the job? “Getting to make someone’s dream of becoming a homeowner into a reality—every single day,” she says.*

#### Q: When should you lock your rate?

__Alliyah:__ I get this question all the time, and the answer is pretty simple. If you’re buying a home, you can lock in your rate as soon as your offer is accepted. I’d recommend going over your loan estimate with your Home Advisor, and establishing your closing date before you lock. 

If you’re refinancing, it’s a little different. You can lock as soon as your application is in. Since choosing a refinance rate is usually based on how much you’ll save, it helps to break down your savings options with your Home Advisor to help you decide. 

Mortgage rates change multiple times per day, so when you see one that you like, I’d suggest locking it in before it can change. When you work with Better Mortgage, you’re actually locking the entire rate table—not just one rate. That means you have time and flexibility to change your mind, even after you lock. Home Advisors like me are always ready to hop on a call to walk you through it. 

## How Taisha Johnson conquered her credit and got her family home

![Abstract Green Squares of Various Shades and a Photo of Taisha Johnson and Her Home Funded by Better Mortgage](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fcdd87d78dc0c466d87b5752cc5cdefc6)

After going through a family loss and a divorce in 2019, Dr. Tashia Johnson had to start from square one as a homebuyer. It took her over a year to get her credit score and finances in the right place. Once she did, she worked with Better Mortgage for the loan she needed, and moved her family into their new house in December 2020.

She credits some of the win to Bethany, her Home Advisor. “I am so grateful to have someone like Bethany fighting for me. I appreciate all of her long hours working on my file, and her advocacy and guidance. We had some bumps along the way to getting this home, but Bethany’s commitment to my dream of getting a home for my kids never wavered.” [Read more about Taisha’s story](https://better.com/content/getting-home-taisha-johnson-testimonial) to learn how much she overcame, and how one-on-one support can help you score your dream home. 

#### 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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 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/start">See your rates</a>  
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You can now borrow roughly $100,000 more in a conforming loan. The move should help buyers keep up with rising home prices. 

FHFA Raised the Cap On Conforming Loans

Blog post image for The FHFA raised the cap on conforming loans

The FHFA raised the cap on conforming loans

![Mortgage News: The Fed Decision Will Likely Drive Rates Up](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F575d11fa68d4454cb020fc3685ed9490)

<br>

## A new announcement from the Fed signals the end of low rates 

![Two People Smiling and Seated Close Together on Sofa Surrounded by Moving Boxes](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fabb3140c916e49e89b7aec8ef7559e41)

The Federal Reserve, the country’s central bank, [recently announced](https://www.cnbc.com/2021/11/03/the-fed-holds-rates-near-zero-heres-what-that-means-for-you.html "www.cnbc.com") they’ll be purchasing fewer bonds. That means mortgage rates are likely to rise slowly through the end of the year. 

When the pandemic began last spring, the Federal Reserve made the move to purchase bonds to keep the economy running smoothly. It helped bring interest rates down to record lows, with the 30-year fixed rate hitting its [lowest point in history at 2.65%](http://www.freddiemac.com/pmms/ "www.freddiemac.com"). 

Now, as the market recovers and inflation rises, the Fed says they’ll begin to pull back the relief measure. Better Mortgage analysts expect to see rates rise steadily from now until the end of the year, without surpassing 3.25%. 

This may not be bad news for your mortgage, though. Rates are still at a low point from a historical perspective, with the 30-year fixed rate dropping slightly to [3.09% this week](http://www.freddiemac.com/pmms/ "www.freddiemac.com"). Many homeowners could save on a refinance, especially with programs like [RefiNow](https://better.com/content/you-could-reduce-your-monthly-costs-with-refinow "better.com") and [RefiPossible](https://better.com/content/you-could-save-on-monthly-costs-with-refipossible-tm "better.com"), which are estimated to drop payments by $100-250 per month. For homebuyers, higher rates may cool down today’s intense competition. We could see smaller price hikes, fewer bidding wars, and more first-time homebuyers enter the market. 

Mortgage rates tend to jump around after any Fed meeting, so locking your rate sooner rather than later may help you save more over the life of your loan. [See the best rates we can offer you](https://better.com/start "better.com") in minutes by getting pre-approved. 

## Why 39% of the largest homebuying generation is comfortable buying online

![Chart: Homebuyers Comfortable Buying Online by Generation](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F70098119f2e04ff0abfc26e67e3647f5)

Digital homebuying has expanded beyond real estate—you can get an [agent](https://better.com/realestate "https://better.com/realestate"), [insurance](https://better.com/hoi "https://better.com/hoi"), and a [mortgage](https://better.com/start "https://better.com/start") entirely online today. That coincides with a shift in who’s shopping for homes, as more millennials become homeowners who are comfortable with digital tools and services. 

Millennials are now the largest generation of homebuyers, with [37% buying homes](https://www.fool.com/the-ascent/research/millennial-homebuying/ "www.fool.com") in the last year. And [39% of millennial homebuyers](https://www.fool.com/the-ascent/research/millennial-home-buying-process/ "www.fool.com") say they’re comfortable with buying a home entirely online, along with 36% of Gen Z buyers. 

Shopping online helps you get a wide range of homes in any location, without having to travel. In fact, nearly [half of 2020 homebuyers](https://www.thebalance.com/should-you-write-an-offer-before-seeing-a-home-1798279 "www.thebalance.com") made offers on homes without seeing them in person. You can also focus your search with help from online tools like a [home affordability calculator](https://better.com/content/a-better-home-affordability-calculator/ "better.com"), which shows you the maximum home price you may be approved for, and [a mortgage calculator](https://better.com/mortgage-calculator "better.com") to estimate how much you’d pay each month. 

When you find a home you love and feel ready to make an offer, digital lenders like Better Mortgage can help you get your foot in the door. Make a competitive all-cash offer at no extra cost with the [Better Cash Offer program](http://better.com/b/cash-offer "better.com"). Or, stand out even more by waiving your appraisal contingency risk-free with the [Better Appraisal Guarantee](https://better.com/content/appraisal-contingency/ "better.com"). When your offer is accepted, the Better Mortgage team works quickly to help you close up to 10 days faster than the industry standard. 

Online buying can help you reach your homeownership goals while saving time, energy, and money. Your first step is [getting pre-approved](https://better.com/start "https://better.com/start"). Read up on [where and how to get a mortgage pre-approval online](https://better.com/content/where-and-how-to-get-a-mortgage-pre-approval-online "better.com"). 

## With interest rates on the rise, should you buy yours down with points? 

![View of the Peak of a Home](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F3be916b712864d03b7d17546ffe9fd20)

Closing costs on a single-family home have risen [12.3% in the first six months of 2021](https://www.housingwire.com/articles/closing-costs-are-up-but-theres-a-catch/ "www.housingwire.com"), to $6,837 with taxes and $3,836 without. With interest rates expected to rise from here, it’s important to save where you can on a mortgage. Buying down your rate with points may help. 

Points, also called discount points, are included in your closing costs. You can choose to pay more of them in exchange for a lower interest rate. One point is equal to 1% of the loan amount, and would typically drop the rate of your loan by about 0.25%. For example, paying $2,000 on a $200,000 mortgage could reduce your rate from 3.5% to 3.25%. That would save you over $10,000 in interest payments over the life of a 30-year loan. 

Buying mortgage points isn’t always the right choice for everyone—it all depends on where and when you break even between spending and saving. Typically, the more wiggle room you have in your budget, and the longer you plan to stay in your home, the more sense it makes to buy down your rate with points. Learn how to run the numbers with our [guide to mortgage points](https://better.com/content/what-are-mortgage-points "better.com"), or [get pre-approved to chat through your options](https://better.com/start "https://better.com/start") with a licensed Better Mortgage Home Advisor.

#### Considering a home loan?

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

<br>

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A new announcement from the Federal Reserve could mean the end of low rates—but that may not be bad news for buyers and homeowners.  

The Fed Decision Will Likely Drive Rates Up

Blog post image for The Fed decision will likely drive rates up

The Fed decision will likely drive rates up

![Mortgage News: How To Get Serious About Your House Hunt](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fba95824b648a4fb28fbc4a133da40aad)

## New to house hunting? Take these first steps to raise your chances of a win.

This year is shaping up to be one of the strongest in homebuying history, with an expected total of [nearly 7 million home sales](https://www.inman.com/2021/10/21/home-sales-should-hit-6-8m-in-2021-moxiworks/?utm_source=hotsheet&utm_term=&utm_medium=email&utm_campaign=Hot%20Sheet%2020211021 "external") around the country. October should tally up to 594,000 home sales, with another 556,000 coming in November. 

With listings flying off the market, it can be hard to figure out how to get ahead of the competition—especially if you’re new to homebuying. Here are some key first steps that can help you go from casual house hunter to serious homebuyer. 

#### Find out how much you can really afford 
Your budget for a mortgage may be higher than you think. To make your search easier, use the [Better Mortgage affordability](https://better.com/content/a-better-home-affordability-calculator/) calculator to see how much you could borrow based on your income, assets, and credit score. Then, when you see a home you love, run the numbers through their [free mortgage calculator](https://better.com/mortgage-calculator) for a clear picture of what you’d pay each month, including interest, insurance, and taxes. 

#### Get pre-approved for your personalized loan costs
Find out what you’d pay for a loan by [getting pre-approved](https://better.com/content/what-is-a-mortgage-pre-approval/). It only takes a few minutes to see your personalized rates and estimated payments from Better Mortgage, with zero obligations or impact to your credit score. Get the ball rolling [by seeing your mortgage rates](https://better.com/start).

#### Prepare for bidding wars with cash
There’s a ton of competition on the market, so be ready to face bidding wars. Making an offer in cash can help you stand out from the crowd—and win. The Better Cash Offer program lets you work with Better Mortgage and Better Real Estate to make an offer using Better’s cash, at no extra cost to you. Find out [more about the cash offer program](https://better.com/b/cash-offer) to see if it’s a good fit.  

These first few steps should help you get started in finding the right homes, loan options, and ways to stand out as a buyer. Read up on [what happens after getting pre-approved](https://better.com/content/what-happens-after-getting-pre-approved) to take it from there. 

![Four Homes Tiered in a Row Against a Blue Sky](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fe59971fd426b4ea4b58ea7de638e07a8)

## What rising inflation means for rates, and where they could go from here
Rates are on the rise, but they’re still low compared to pre-pandemic months. The 30-year fixed rate mortgage rose [0.04% last week to an average of 3.09%](http://www.freddiemac.com/pmms/ "external"). For context, the rate hovered closer to 3.50% at the start of last year. 

There are a number of [factors that affect mortgage rates](https://better.com/content/what-affects-mortgage-rates/), but a large driver for today’s rise is inflation. Inflation refers to an increase in the prices of goods and services around the country, and how it relates to people’s ability to purchase them. If the goods and services you spend money on each year rose by 2% on average, it would mean 2% inflation. In other words, your income last year would buy 2% less at today’s prices. That’s a healthy rate of inflation, [according to The Federal Reserve](https://www.federalreserve.gov/faqs/5D58E72F066A4DBDA80BBA659C55F774.htm#:~:text=The%20Federal%20Reserve%20has%20not,percent%20or%20a%20bit%20below"external").

Today, [inflation is on the rise and likely to stay that way](https://www.reuters.com/world/us/yellen-says-us-has-options-raise-revenue-pay-build-back-better-bill-2021-10-24/ "external") until the middle of next year. That can drive mortgage rates up as investors on the market expect lenders to increase their rates to align with their return on a loan. Between now and the end of the year, Better Mortgage analysts expect that rates to keep climbing, but likely [won’t pass 3.25%](https://better.com/content/rates-remain-low-but-could-rise-from-here). 

Trying to time the market could cost you more in the long run. Get the ball rolling on your home loan now by [seeing your mortgage rates](https://better.com/start).

#### 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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Ready to buy a home? Learn how to get serious about your house hunt with practical tips on budgeting, pre-approval, and navigating a competitive market.

How To Get Serious About Your House Hunt

Blog post image for How to get serious about your house hunt

How to get serious about your house hunt

![Mortgage News: Why Rising Home Values Could Help You Save](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F560c388ad2684deba47f7761f6347b92)

<br>

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

## Your home may have gone up in value—and it could help you pay less on your mortgage

![Line Graph Showing U.S. Home Value Growth Year-Over-Year](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F883beaaa87264b8ead8d3d417592a220)

<p class="legal">Source: <a href="https://www.zillow.com/research/august-2021-market-report-30110/">Zillow Home Value Index</a></p>
<br>

Market values of homes around the country have risen by a record gain of [17.7% in the last year](https://www.zillow.com/research/august-2021-market-report-30110/ "17.7% in the last year"), and the typical U.S. home was worth [over $5000](https://www.zillow.com/research/august-2021-market-report-30110/ "over $5000") more in August than it was in July. That puts today’s homeowners in a good position to drop their private mortgage insurance (PMI) when they refinance. 

Private mortgage insurance (PMI) is added to your monthly mortgage payment as a buffer for some of the financial risk your lender takes on. If you put less than 20% down on your loan, it gets automatically applied. For conventional loans, PMI gets removed once you’ve gained 20% of your home equity. This happens as you pay off your loan, or when your home goes up in value. 

If you’ve been paying for PMI each month, it’s probably a good time to refinance and see how much your home is worth today. Your appraisal gives you an updated loan-to-value ratio (LTV), which can lower the price of the refinance, qualify you for more favorable terms, and drop PMI from your monthly payment. 

Get the ball rolling on a refinance to [see how much you could save today](http://better.com/start "see how much you could save today"). And for more details, read up on [how private mortgage insurance works](https://better.com/content/what-is-pmi-or-private-mortgage-insurance/ "how private mortgage insurance works"). 

## Mortgage rates jumped—and they’re expected to keep climbing.

After weeks of [hovering near 2020 lows](https://better.com/content/rates-remain-low-but-could-rise-from-here "hovering near 2020 lows"), mortgage rates are back on the rise. The 30-year fixed rate average rose 0.13% last week to [3.01%](http://www.freddiemac.com/pmms/)—its highest level [since July](https://www.cnbc.com/2021/09/29/mortgage-demand-falls-as-rates-rise-to-highest-level-since-july.html). Better Mortgage analysts expect rates to continue inching upward, though they’re not likely to rise beyond 3.25%. The market drove rates up in response to The Federal Reserve’s signals that they’ll [soon be tapering the measures](https://www.marketwatch.com/story/mortgage-rates-jump-above-3-creating-pressure-for-home-buyers-11633011496 "soon be tapering the measures") that have helped keep mortgage rates low since the pandemic began. 

Just a fraction of a percent can make a difference in your monthly payments, so it may be a good idea to move quickly on a new loan before rates can jump further. You could qualify for programs like RefiNow and RefiPossible, which guarantee homeowners drop their monthly payments by at least $50, and are estimated to save $3000 a year. [Check out your rates with Better Mortgage](https://better.com/start "Check out your rates with Better Mortgage") to see where you stand, and learn more about [RefiNow](https://better.com/content/you-could-reduce-your-monthly-costs-with-refinow "RefiNow") and [RefiPossible](https://better.com/content/you-could-save-on-monthly-costs-with-refipossible-tm "RefiPossible").  

![Image of Person in Minimal Setting with Laptop Smiling](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F8d38ea7761f74ebfa5e7ffaffd6d0cb6)

#### Considering a home loan?

Get your custom rates in minutes [with Better Mortgage](https://better.com/ "Better Mortgage"). 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>  
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With property values rising, today’s homeowners are in a good position to refinance with new terms that remove private mortgage insurance. 

Why Rising Home Values Could Help You Save

Blog post image for Why rising home values could help you save

Why rising home values could help you save

![Mortgage News: What You Should Know About Home Appraisals](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Ff824e7957e4f44d2a633cc0e6bd36831)

<br>

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

## What buyers should look out for in the home appraisal stage

![Jillian White, Head of Collateral at Better by NBC News](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Ff69fc0e97f204378915e9105d52b0435)

<p class="legal">Jillian White, Head of Collateral at Better, is growing the company's in-house team of appraisers to better represent the areas they serve. <br>Image source: <a href="https://www.nbcnews.com/news/us-news/black-appraisers-call-out-industry-s-racial-bias-need-systemic-n1269452">NBC News</a></p>

<br>

An appraisal evaluates a home’s market value. Lenders often require them to make sure a seller's price is reasonable, and that the amount you’re borrowing is in line with what the home is worth. Typically, a professional appraiser will walk through the property to assess it, and consider prices of the market it’s located in. 

As a buyer, you can’t control exactly how a seller’s home is shown. But there are a few things to keep in mind that help ensure an appraisal runs smoothly, and doesn’t hold up your buying timeline. 

## Learn how the appraisal affects LTV

Appraisals help your lender nail down the [loan-to-value ratio (LTV)](https://better.com/content/3-most-important-numbers-mortgage-application/ "loan-to-value ratio (LTV)") on your mortgage, so they know how much risk they’re taking on. LTV is calculated by dividing the total loan amount by the home’s appraised value. When the appraised value goes down, the LTV goes up, which means more risk for the lender. 

An ‘appraisal gap’ is the difference between a home’s appraised price and the offer you made on it. Appraisal gaps can spell trouble for buyers, because they usually have to renegotiate a price with the seller, increase the down payment, or come up with a new loan entirely. 

## Get the Better Appraisal Guarantee 

As a buyer, you have the option of adding or waiving an [appraisal contingency](https://better.com/content/appraisal-contingency/ "appraisal contingency") in your contract, which lets you back out of the sale if the appraisal gap is too big. Sellers don’t like that uncertainty, so waiving the contingency can make your offer more attractive. The problem is, it also increases risk. 

With the [Better Appraisal Guarantee](https://better.com/with/appraisal-guarantee-terms/ "Better Appraisal Guarantee"), you get the same loan terms you locked no matter what the appraisal gap is. Sellers will know the sale won’t fall through, and buyers don’t have to take on any risk. 

## Keep an eye out for personal bias

The appraisal industry is often criticized for how much it leaves up to personal bias and opinion. Jillian White, Better’s Head of Collateral, says appraising is a “mix of science and artistry, and the artistry is where the unconscious bias comes in.” For example, a new wing can add anywhere between $10,000 and $20,000 to a home’s value, but it’s up to the appraiser to decide where it lands in that range. 

[Several studies](https://www.nbcnews.com/news/us-news/black-appraisers-call-out-industry-s-racial-bias-need-systemic-n1269452 "Several studies") have shown that people tend to subconsciously associate with their own race more positively, and [96.5% of all real estate appraisers](https://www.bls.gov/cps/cpsaat11.htm "96.5% of all real estate appraisers") are white. Between 2015 and 2020, appraisal gaps came up at a rate of [15.4%](https://www.nationalmortgagenews.com/news/appraisal-gaps-are-more-prevalent-in-black-latino-areas-freddie-mac) for Latino-majority neighborhoods, and [12.5%](https://www.nationalmortgagenews.com/news/appraisal-gaps-are-more-prevalent-in-black-latino-areas-freddie-mac) in areas with a majority of Black homeowners. 

If an appraiser’s evaluation feels off, don’t be afraid to get a second appraisal. It also helps to work with companies that are committed to diversifying their team. Starting next month, Better will be hiring and training a pipeline of 120 in-house appraisers who are representative of the communities they serve.

## Mortgage rates jumped—and they’re expected to keep climbing.

After weeks of [hovering near 2020 lows](https://better.com/content/rates-remain-low-but-could-rise-from-here "hovering near 2020 lows"), mortgage rates are back on the rise. The 30-year fixed rate average rose 0.13% last week to [3.01%](http://www.freddiemac.com/pmms/)—its highest level [since July](https://www.cnbc.com/2021/09/29/mortgage-demand-falls-as-rates-rise-to-highest-level-since-july.html). Better Mortgage analysts expect rates to continue inching upward, though they’re not likely to rise beyond 3.25%. The market drove rates up in response to The Federal Reserve’s signals that they’ll [soon be tapering the measures](https://www.marketwatch.com/story/mortgage-rates-jump-above-3-creating-pressure-for-home-buyers-11633011496 "soon be tapering the measures") that have helped keep mortgage rates low since the pandemic began. 

Those kinds of rates mean that the monthly payment on today’s median-priced home is around [$150 higher than it was a year ago](https://www.marketwatch.com/story/mortgage-rates-jump-above-3-creating-pressure-for-home-buyers-11633011496 "$150 higher than it was a year ago"). That said, only $25 of that increase is due to higher rates, the rest is owed to rising home prices. Many homebuyers can still save, and [getting a home with an online lender](https://better.com/content/benefits-of-online-lender "getting a home with an online lender") can help by cutting out other unnecessary fees. [Check your rates with Better Mortgage](http://better.com/start "Check your rates with Better Mortgage") to see where you stand. 

![Image of Person in Minimal Setting with Laptop Smiling](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F8d38ea7761f74ebfa5e7ffaffd6d0cb6)

#### Considering a home loan?

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

<br>

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Appraisals have a big impact on your ability to buy a home, but can come with some personal bias. Find out how to make sure your appraisal runs smoothly. 

What You Should Know About Home Appraisals

Blog post image for What you should know about home appraisals

What you should know about home appraisals

![Mortgage News: How First-Time Buyers Can Compete As Prices Rise](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fe914f1f489d64d82bb4bf1ecd4d130a7)

<br>

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

<ul>
<li><strong>First-time buyer? Here’s how to avoid getting priced out.</strong></li>
<li><strong>More homeowners refinance while rates hover at a six-month low</strong></li>
<li><strong>New construction home sales dip as lumber costs rise</strong></li>
<li><strong>What is an escrow account?</strong></li>
</ul>

Anyone searching for a home today is up against rising prices, bidding wars, and intense competition. But the path to homeownership tends to be extra bumpy for first-time buyers, because they enter the market with smaller budgets and no home equity. In July, [37% of first-time buyers](https://www.inman.com/2021/07/16/first-time-buyers-still-eager-despite-snags-on-path-to-homeownership/ "external") said they had to set back their homebuying timeline after losing income during the pandemic. 

Instead of hitting pause on your search, there are some loan options that could help you compete for a home—without putting more money on the table. 

#### Make a lower down payment

It takes a [year longer to save for a 20% down payment](https://www.wkrn.com/news/local-news/reports-first-time-buyers-need-year-longer-to-save-for-20-percent-down-payment-compared-to-5-years-ago/ "external") than it did 5 years ago, which may be why [35% of buyers](https://www.nar.realtor/sites/default/files/documents/2020-downpayment-expectations-and-hurdles-to-homeownership-report-04-16-2020.pdf "external") cite it as their primary roadblock to owning a home. But 20% down isn’t always required—and last year, [roughly two-thirds of first-time buyers](https://www.zillow.com/research/how-long-to-save-a-down-payment-29735/ "external") put down less than that. 

With an [FHA loan](https://better.com/content/what-is-an-fha-loan/), you could put as little as 3.5% down on a home and still lock in competitive rates. These mortgages carry more lenient qualifying guidelines than conventional loans, especially when it comes to savings and credit scores, so it’s worth finding out [if it’s the right option for you](https://better.com/content/fha-loan-requirements/ "external").

#### Improve your debt-to-income ratio

Saving for a home can be tough to balance alongside student loan debt, which accounts for [20% of the decline](https://www.federalreserve.gov/publications/files/consumer-community-context-201901.pdf "external") in homeownership among young adults. But the reality is, lenders don’t look at how much student debt you have in total. They look at how you’re paying it down each month, typically through your debt-to-income (DTI) ratio. Learn [how to assess your DTI](https://better.com/content/what-is-a-good-debt-to-income-ratio/) to see where you stand, and raise your chances of [getting approved for a mortgage with student loans](https://better.com/content/getting-a-mortgage-with-student-loans/). 

#### Get the Better Appraisal Guarantee

Negotiating with a seller doesn’t always mean putting more cash on the table. [Waiving your appraisal contingency](https://better.com/content/appraisal-contingency/) can boost your odds of an accepted offer by 50%.* Normally, you’d risk losing your lender or having to change your loan terms. But with the [Better Appraisal Guarantee](https://welcome.better.com/better-appraisal-guarantee/), you could get the loan terms you locked no matter what the appraisal says.** 

Even with historically low inventory, first-time buyers still have a place in today’s market. And with mortgage rates as low as they are, it’s worth taking a look at what you can afford. [Crunch the numbers with our affordability calculator](https://better.com/content/a-better-home-affordability-calculator/) to see what a new home could look like with your budget. 

## More homeowners refinance while rates hover at a six-month low

Last week, the [30-year fixed rate average ticked up to 2.80%](http://www.freddiemac.com/pmms/ "external"). Even with the increase, the rate is at a 6-month low and still only 0.15% away from an all-time low of 2.65%. [Millions of homeowners](https://time.com/nextadvisor/mortgages/mortgage-news/do-you-qualify-to-save-on-refinance-loan/ "external") stand to save on a refinance, and many are taking note. Refinance applications have [jumped up 9% week-over-week](https://www.cnbc.com/2021/07/28/mortgage-rates-at-six-month-low-and-refinances-shoot-up.html "external") around the country. 

A refinance can lower your mortgage rate and monthly payments, and provide other benefits too. Whether you want a shorter loan term, an influx of cash, or fewer debt payments, getting a new loan can make it happen. [Find out how a refinance could help](https://better.com/content/6-reasons-to-refinance-your-mortgage/) you reach your financial goals, and [check your rates](https://better.com/start) to see how much lower your payments could be. 

## New construction home sales dip as lumber costs rise

Rising home prices are [tamping down the demand](https://better.com/content/how-to-get-an-offer-accepted-in-todays-market/) for new construction homes, and June saw the [lowest number of new home sales](https://www.cnbc.com/2021/07/26/housing-boom-is-over-as-new-home-sales-fall-to-pandemic-low.html "external") since April 2020. The price spike is thanks to a shortage in softwood lumber, which increased in cost by [over 300% during the pandemic](https://www.cnbc.com/2021/07/19/homebuilder-confidence-slips-in-july-as-construction-costs-rise.html "External"). Now it costs roughly 75% more than it did in 2019, but builders have had to raise their prices to keep up. 

It can be tough to bargain down the price of a newly built home. Instead, it may be easier to negotiate with a builder through upgrades to the home itself. Choose materials from their showroom that would add value to the property, like hardwood floors, or marble countertops. If you want to learn what to look out for, avoid, and prepare for in a new home sale, [read our quick and easy Q&A](https://better.com/content/buying-a-new-construction-home/). 

## What is an escrow account? 

Escrow accounts are specifically designed to hold money meant for home costs, whether it’s during the sale itself or throughout the course of a mortgage. They usually come into play after a loan is finalized, but it helps to know what they are beforehand too. [Get to know the ins and outs of escrow accounts](https://better.com/content/what-is-an-escrow-account/)—from what they are, to how they work, to why opening one could help protect your mortgage. 

## Considering a home loan?

Get your custom rates in minutes [with Better](https://better.com/) Mortgage. 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">*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>

<p class="legal"><a href="https://welcome.better.com/better-appraisal-guarantee/">**See Better Appraisal Guarantee terms and conditions</a></p>

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First-time homebuyers are getting left behind as home prices skyrocket. Follow these tips to improve your standing, without putting more money down.

How First-Time Buyers Can Compete As Prices Rise

Blog post image for How first-time homebuyers can compete as prices rise

How first-time homebuyers can compete as prices rise

![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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Mortgage News: The Federal Reserve intends to keep interest rates near zero in an effort to speed economic recovery.

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