July 12, 2021
4 MINUTE READ
For Arman Aroutiounian, Reali’s Vice President of Capital Markets, a deep understanding of capital markets and passion for finance come naturally. Combine those attributes with a positive attitude, driving initiatives to the finish line, relationship building, and a passion for helping our customers secure the lowest rates, and it’s no wonder he leads the charge in driving Reali’s capital markets strategy.
Even though Arman’s team is center stage in ensuring our borrowers are quoted the most competitive rates and save money, he most often is found behind the scenes providing data-driven insights to inform strategic, financial, and operational decision-making across Reali.
Here are Arman’s predictions on the housing market and mortgage rates for the rest of 2021 — a topic closely tied to those of us hoping to buy in the near future.
The biggest driver of mortgage rates today are the actions the Federal Reserve is taking to curb the economic impact of the pandemic. Keeping the benchmark rate near zero and the purchase of treasuries and mortgage-backed securities are all factors that affect mortgage rates.
A decline in COVID-related cases and general global unrest will influence the direction in which rates will go over the next year.
There’s a combination of factors that direct rate movement, some of which include a reversal in the Federal Reserve’s policy to keep rates low, a decline in the purchase of treasuries and mortgage-backed securities, increased (or expected) inflation, and a rise in corporate profits which may cause greater returns in the stock market. However, I do not anticipate mortgage rates rising by more than 0.5% by the end of 2021.
I don’t foresee any meaningful deviation in mortgage rates this year. If I had to make a prediction, I could see the 30-year fixed mortgage rate hover around 3.25% and the 15-year fixed at around 2.4%. I attribute the move to rising inflation and a potential tightening of the monetary policy.
Whether you are a renter or an existing homeowner looking to find a home more suitable to your lifestyle, I recommend you move forward with purchasing. There are many unique benefits such as building equity and tax breaks only available to homeowners. Plus, historically low rates can help you increase your purchase power despite price growth. If you are looking to become a landlord, be sure to crunch the numbers and cover all costs for a solid return on your investment home. For those looking to refinance, this is a very opportune time to secure a lower rate and save thousands of dollars over the term of your new loan.