The Latest Trends in the Mortgage Industry

Many people wonder about the current trends in the mortgage industry, especially since the opinions of the experts can be a bit contradictory at times… A recent study reveals some interesting facts and prepares us for what is to come.

Among the new trends already announced, there is one that grew fast, during the pandemic, and is expected to continue: many people who opt for a mortgage to buy a house are looking for houses with dedicated office spaces, as many want to continue working from home, at least occasionally. This is normal, after almost 2 years of the pandemic.

Also, an increase in the prices for the houses that will be constructed and finished in the next 2 years is announced, due to the increase in the prices of materials, but also to the delays in deliveries.

The 10 trends already identified or announced on this year’s real estate market

1. The interest rate on mortgages progressively increases
2. The accessibility of purchasing homes through credit decreases
3. Young buyers, at their first purchase, will be the most affected
4. New constructions are still preferred
5. The increase in demand for apartments will slow down
6. The demand for vacant land and houses with land remains high as a result of the prolongation of the pandemic and buyers’ preferences for quiet residential areas, with low population density, in a green environment
7. The prices demanded for the houses that will be completed in the next 2 years are increasing at a pretty fast pace due to the increase in material prices, but also due to the delay in deliveries
8. The existing offer in the secondary market decreases
9. Buyers no longer sell the properties they already own and turn them into an investment property, or pass them on to family members
10. Many people are looking for houses with a dedicated office space, because they want to continue working from home, at least now and then.

Mortgages are rising: how a real estate bubble breaks out in real time

The increase in the key interest rate always affects the loans of households and businesses, respectively people`s personal finances. After a decade of artificially low interest rates applied by central banks, a record consumer debt has been now reached.

The raising of interest rates is the pawn that makes real estate bubbles explode. The faster and higher the interest rate, the faster the bubble will explode.

In the US, the key interest rate increase began in March this year. In real time, we see the negative effects on the real estate market. Denver home loan mortgage rates have seen the biggest increase in 35 years, as inflation and interest rates rise, threatening to leave many first-time buyers out of the way. The average interest rate on a 30-year mortgage jumped by more than half a percentage point to 5.78%, the highest level since November 2008, according to mortgage specialists.

The rapid acceleration has threatened to cool down a strong real estate market because Americans — many of them working from home during the coronavirus pandemic — have taken advantage of lower mortgage rates to buy homes, thus taking the prices to record levels.

But the recent rise in Denver home loan mortgage rates threatens this accessibility, slowing down the demand for housing.