A year ago, with mortgage rates steadily rising from the 2% and 3% levels that homebuyers had long gotten used to, Heart Mountain Realty owner Eric Paul cautioned homebuyers not to try and simply wait out the rise in rates, as they might not be coming down quickly.

Instead, in the year since rates have only risen further, and Devan Fink, mortgage loan originator at First Bank in Powell, is advising prospective homebuyers to do like Paul had said — don’t hold your breath waiting for rates to fall.

“People will always need to buy homes to live in,” she said. “I would advise folks who are in the market to buy a home to get prequalified, this shows sellers that you are reliable buyer. Even in this volatile interest rate environment, you can still build equity in the home you buy.”

Homes are a long-term investment and potential homebuyers should visit with a mortgage lender to see if it is the right time for them to take on a mortgage, she added.

Mortgage rates are predicted to stay above 7% for the rest of the year, although they could dip below that next year, according to Fannie Mae’s October housing forecast. Researchers predicted rates would end the year around 7.3% and stay above 7% until the second quarter of 2024.

“We expect the higher mortgage rate environment to continue to dampen housing activity and further complicate housing affordability into 2024,” said Doug Duncan, Fannie Mae’s senior vice president and chief economist, in a press release.

Rates had dipped to a recent low of 2.65% in January 2021 for a 30-year fixed rate mortgage before a sharp climb, which has led to a 7.57% weekly mortgage rate in mid October, according to businessinsider.com.

“Interest rates have been volatile recently,” Fink said. “They can change daily and sometimes hourly. The interest rate for a 30-year fixed conventional loan has varied between 7.50%-8.00% recently. This rate is dependent on what an individual’s financial picture looks like; debt-to-income, credit score, loan to value and purpose of the mortgage are factors that contribute to what rate a person can get.”

There are opportunities for certain homebuyers to get even lower rates. The best mortgage rate right now is through WCDA (Wyoming Community Development Authority). Fink said their First Time Homebuyer rate is at 6%, APR 6.125%. WCDA is the state’s leading resource for housing finance and First Bank of Wyoming offers many of their loan products.  

“Today’s market is a purchasers’ market,” she said. “There are not a lot of refinances happening currently, due to the higher interest rate environment we are in. For people that currently have Home Equity Lines of Credit or Adjustable-Rate Mortgages, they may want to consider refinancing to get into a fixed rate mortgage.”

She said buyers can also visit with their realtors/brokers to negotiate the possibility of sellers helping with or paying all the home loan closing costs associated with getting a mortgage. Another option to offset higher interest rates is Temporary Interest Rate Buydowns — a financing tool to maximize your savings in a higher interest rate environment.

Mortgage assistance programs

First Time Homebuyers may qualify for WCDA’s First Time Home Buyers loan program. They have zero to little down payment options with products such as, Rural Development, FHA, and VA home loans for First Time Homebuyers. 

Another program First Bank of Wyoming utilizes is the Home$tart Assistance grant available through the Federal Home Loan Bank for $7,500. This $7,500 can be used by first time homebuyers to help with down payment and closings costs.