The home buying process for first time loan applicants are becoming a bit pricey due to an increase in mortgage rates.
Data from Mortgage Giant Freddie Mac shows the average 30-year fixed-rate mortgage averaged 5.13% as of Aug. 18. A year ago at this time, it averaged 2.86%.
Rachel Harrelson, a local loan officer I.D. #nmls1797534, said mortgage interest rates are not directly tied to interest rates set by the federal reserve, which have been increasing lately in response to inflation.
"The mortgage backed bonds are bonds, and so the bond market is what drives the interest rates for mortgages," said Harrelson.
Harrelson said if people stop buying mortgage backed bonds home mortgage interest rates could go up, because those rates are tied to how good the mortgage bonds are doing.
So, if the bonds go up then the home interest rates go down. She said right now mortgage rates are historically low.
“And so now that they have been trending back up, a bit and are kind of leveling out, everyone gets nervous because they haven’t seen them go up in the many years," said Harrelson.
According to real estate professional Devante Boll, the housing market in Corpus Christi has been strong.
“We’ve got the military, the oil industry so there’s always somebody needing a home down here in corpus and there’s always somebody needing to sell a home because they have to go to the next place," said Boll.
Boll said in Corpus Christi the median home price, as of July, is $275,000 a 13% increase from last year due to inventory of houses available.
“There were so many people that jumped into the market, they were trying to take advantage of those low interest rates but there weren’t enough homes to go around," said Boll.
Harrelson said first time home buyers should look into applying for a loan through programs from banks, credit unions, and mortgage companies.
“And in the state of Texas, they’re super helpful because they have three different down payment assistant programs they can choose from," said Harrelson.
“Trust your agent, connect with a lender, and buy a home if you’re in a financial position to do it because at least you’re getting your legs in the door now," said Boll.
Harrelson also recommends you go into a local lender’s office and talk with someone in person instead of doing the entire process online.