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Mortgage rates are up. Does it still make sense to apply for a loan?
It’s no secret that mortgage rates are high right now — especially compared to what they were a few years ago. Depending on whether you opt for a 15-year or 30-year mortgage, rates are averaging around 6.5% to 7% — and recently ticked up slightly to a month-long high. And, those types of rates can be a hindrance if you want to buy a new home.
After all, even a slight increase in your mortgage rate can cost you thousands of dollars in interest over the life of the loan. So, with mortgage rates where they’re at currently, does it make sense to apply for a loan — or should you wait for rates to fall?
Don’t wait to buy your dream home. Lock in your mortgage rate now.
Mortgage rates are up. Does it still make sense to apply for a loan?
Back in 2020 and 2021, it was possible to get a mortgage loan rate close to 3% — but today’s rates are more than double that. It’s important to remember, though, that those rates were due in large part to the COVID-19 pandemic, and it’s unlikely that mortgage rates will fall that low again anytime soon.
Not to mention, there are several other reasons you may want to secure a mortgage loan now, including:
Competition is increasing
When mortgage rates are high, it costs more to borrow money for a home, and in turn, some potential buyers are priced out of the market. As a result, you have less competition to contend with.
However, mortgage loan applications increased 3.7% last week when compared to the week prior. This suggests that more buyers are starting to flood the market. So, what does that mean for you?
As more buyers enter the market, there’s a higher likelihood that homeowners will have more offers to choose from. Moreover, prices may increase as demand for new homes grows. So, you could miss the opportunity to get your dream home or be forced to pay more for it if you wait.
Get preapproved on a mortgage loan today.
You can refinance later
Homebuyers often look at mortgage rates as though they’re set in stone, but that’s not the case. If you keep the same mortgage through the life of the loan, and you have fixed interest, you can expect to pay the same rate until it’s paid off, of course — but you can always refinance.
In other words, you can purchase your home now while competition and prices are relatively low — and then refinance your home in the future when rates fall and competition drives prices upward.
You could get a lower rate
There are a couple of ways you may be able to get a lower-than-average interest rate on your mortgage:
- Mortgage points: Mortgage points are fees paid to your mortgage company to lower your interest rate — typically by a percentage of a point. This could save you quite a bit of money over the long run, but it may not make sense if you plan on refinancing in the future. So, consider your future plans beforehand.
- Adjustable rate mortgages (ARMs): It could also be smart to consider an adjustable-rate mortgage, as the initial fixed rate tends to be lower, which could save you money on interest as you wait for mortgage rates to fall. Moreover, ARMs have variable interest rates that follow the fixed-rate period of the loan. So, if rates have declined during the variable rate period of your loan, you’ll likely enjoy a lower interest rate on your mortgage loan as well.
It’s unclear what the Federal Reserve might do next
There’s a chance that mortgage rates may drop in the future, but nobody knows for sure what may happen. The Federal Reserve has suggested that lower rates may happen at some point in 2024, but inflation is still above the Fed’s 2% target — and the inflation rate ticked back up unexpectedly in December 2023.
If the inflation rate continues to climb or stay stagnant, more Fed rate hikes could happen instead. And that, in turn, would have an impact on mortgage rates.
Lock in your mortgage rate today before any potential rate hikes.
The bottom line
Mortgage rates are higher than many homebuyers would hope for — especially when you compare them to the record-low rates that were available a couple of years ago. However, you shouldn’t let that stop you from buying the house of your dreams. By securing a mortgage loan and buying a home now, you could avoid the increasing competition and higher home prices that could lie ahead.
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A study to devise nutritional guidance just for you
It’s been said the best meals come from the heart, not from a recipe book. But at this USDA kitchen, there’s no pinch of this, dash of that, no dollops or smidgens of anything. Here, nutritionists in white coats painstakingly measure every single ingredient, down to the tenth of a gram.
Sheryn Stover is expected to eat every crumb of her pizza; any tiny morsels she does miss go back to the kitchen, where they’re scrutinized like evidence of some dietary crime.
Stover (or participant #8180, as she’s known) is one of some 10,000 volunteers enrolled in a $170 million nutrition study run by the National Institutes of Health. “At 78, not many people get to do studies that are going to affect a great amount of people, and I thought this was a great opportunity to do that,” she said.
It’s called the Nutrition for Precision Health Study. “When I tell people about the study, the reaction usually is, ‘Oh, that’s so cool, can I do it?'” said coordinator Holly Nicastro.
She explained just what “precise” precisely means: “Precision nutrition means tailoring nutrition or dietary guidance to the individual.”
The government has long offered guidelines to help us eat better. In the 1940s we had the “Basic 7.” In the ’50s, the “Basic 4.” We’ve had the “Food Wheel,” the “Food Pyramid,” and currently, “My Plate.”
They’re all well-intentioned, except they’re all based on averages – what works best for most people, most of the time. But according to Nicastro, there is no one best way to eat. “We know from virtually every nutrition study ever conducted, we have inner individual variability,” she said. “That means we have some people that are going to respond, and some people that aren’t. There’s no one-size-fits-all.”
The study’s participants, like Stover, are all being drawn from another NIH study program called All Of Us, a massive undertaking to create a database of at least a million people who are volunteering everything from their electronic health records to their DNA. It was from that All of Us research that Stover discovered she has the gene that makes some foods taste bitter, which could explain why she ate more of one kind of food than another.
Professor Sai Das, who oversees the study at Tufts University, says the goal of precision nutrition is to drill down even deeper into those individual differences. “We’re moving away from just saying everybody go do this, to being able to say, ‘Okay, if you have X, Y and Z characteristics, then you’re more likely to respond to a diet, and somebody else that has A, B and C characteristics will be responding to the diet differently,'” Das said.
It’s a big commitment for Stover, who is one of 150 people being paid to live at a handful of test sites around the country for six weeks – two weeks at a time. It’s so precise she can’t even go for a walk without a dietary chaperone. “Well, you could stop and buy candy … God forbid, you can’t do that!” she laughed.
While she’s here, everything from her resting metabolic rate, her body fat percentage, her bone mineral content, even the microbes in her gut (digested by a machine that essentially is a smart toilet paper reading device) are being analyzed for how hers may differ from someone else’s.
Nicastro said, “We really think that what’s going on in your poop is going to tell us a lot of information about your health and how you respond to food.”
Stover says she doesn’t mind, except for the odd sounds the machine makes. While she is a live-in participant, thousands of others are participating from their homes, where electronic wearables track all kinds of health data, including special glasses that record everything they eat, activated when someone starts chewing. Artificial intelligence can then be used to determine not only which foods the person is eating, but how many calories are consumed.
This study is expected to be wrapped up by 2027, and because of it, we may indeed know not only to eat more fruits and vegetables, but what combination of foods is really best for us. The question that even Holly Nicastro can’t answer is, will we listen? “You can lead a horse to water; you can’t make them drink,” she said. “We can tailor the interventions all day. But one hypothesis I have is that if the guidance is tailored to the individual, it’s going to make that individual more likely to follow it, because this is for me, this was designed for me.”
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Story produced by Mark Hudspeth. Editor: Ed Givnish.
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