Mortgage lenders see increased demand for new home purchases, Fannie Mae reports

Despite low housing inventory and record-high home values, enthusiasm from home buyers remains high. Mortgage lenders reported increased demand for home purchase loans in the past three months, according to a report by Fannie Mae released last month. 

Meanwhile, the demand for mortgage refinancing has fallen significantly since its boom in 2020 — even though historically low refinancing rates and skyrocketing home equity make it a good time to refinance a mortgage. 

Whether you're shopping for a new home or you just want to save money on your current home loan, you can begin the mortgage process on Credible. Shopping around for the best rate on a fixed-rate mortgage can save you thousands over the life of your home mortgage loan. 

LOW DOWN PAYMENT MORTGAGE OPTIONS FOR FIRST-TIME HOMEBUYERS

More housing inventory will flood the market soon, simplifying the home buying process

Homebuyers face plenty of challenges in today's real estate market, thanks to high demand and low inventory. But demand in the housing market should cool off within the next few months, experts say, although home prices will likely remain high. Plus, current mortgage rates are holding steady below 3%, so it's smart to take out a mortgage while rates are low.

Here are some tips for buyers ahead of an influx in housing inventory:

• Consider homes below your price range. Many homes are selling for well above asking price, so looking at the very top of your purchase price range might not give you wiggle room if you need to put in a competitive offer. Use a mortgage calculator to estimate your monthly payments.
• Be flexible with your closing date. This is a way to set your offer apart from the rest without sacrificing typical contingencies like a home inspection, or offering way above asking price.
• Come prepared with a mortgage preapproval letter. Getting preapproved for a mortgage shows sellers that you're serious, and they won't likely consider an offer if you haven't taken this step. Shop around for mortgages on Credible so you can begin the home buying process.

HERE’S WHY YOU SHOULD (OR SHOULDN’T) REFINANCE YOUR MORTGAGE

It's still a good time to refinance, despite falling demand

Mortgage lenders have reported decreased demand for mortgage refinancing, but it's not due to rising rates. Today's refinance rates remain near historic lows, hovering well under 3% for all loan lengths, based on data from Credible.

In addition to low refinance rates, homeowners can take advantage of rising home equity. The average homeowner gained more than $33,000 in home equity over the past year, according to a recent consumer survey from CoreLogic. This could make it possible to get a cash-out refinance for home improvements while still securing a record-low interest rate, which will save you money over time. 

You can compare rates across multiple lenders by filling out a single form on Credible. This can simplify the mortgage experience so you can achieve your financial goals. 

HOW TO PAY OFF YOUR MORTGAGE EARLY: 5 OF THE BEST OPTIONS TO EXPLORE

Mortgage lenders have been easing their credit standards

The Fannie Mae report also found that the net share of lenders who have eased their credit standards has grown since last year, meaning that it may be easier for fair-credit buyers or homeowners to qualify for a mortgage or refinance product.

If you've been considering purchasing a home or refinancing your mortgage, but you've been holding off due to concerns with your credit score, consider mortgage prequalification. This allows you to see your potential terms, such as the loan amount and interest rate. Getting prequalified for a home mortgage doesn't affect your credit score, and it's free. 

You can see if you're a good candidate for a home mortgage loan or mortgage refinance on Credible's online loan marketplace. While you're there, estimate your monthly mortgage payments with a mortgage calculator to gauge home affordability. 

HOW TO BUY HOMEOWNERS INSURANCE

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.