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News & Insights | Mortgage News

![Mortgage News: Homeowner Credit Scores Are At A Record High](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F0e1e42fe40d74e358f556e229b1c8ea4)

<br>

Here’s a look at the latest developments in the refinance market this week.

## Homeowner credit scores have hit a record—and yours could be higher than you think

![Top Down View of Two Persons Discussing Something They See on a Laptop](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F4e50ebfba8e84ea8b40776cecc78724f)

<br>

Credit scores, like home prices and property values, have been rising since the start of the pandemic. Mortgage holders across the country now have the highest credit scores in more than 15 years, with [82% holding a FICO score of 700 or higher](https://www.yahoo.com/?err=404&err_url=https%3a%2f%2ffinance.yahoo.com%2fnews%2fmortgage-borrowers-credit-scores-reached-151542751.html "external") in the first few months of 2021. That’s up from 73.8% in spring 2020. 

Many homeowners refinanced their mortgage in the last year, likely leading to the rise. Others may have moved to more affordable homes to work remotely and spend less. 

A [new change from Fannie Mae](https://better.com/content/a-fannie-mae-change-could-help-homeowners-save) has lenders like Better Mortgage assessing credit scores differently. If you add a co-borrower to your application, your scores will now be combined for an average, instead of only the lowest being considered. That means you could qualify for a loan if your credit score wasn’t previously high enough. 

A higher credit score can open up your loan options, and even save you money on your mortgage. [Check out our rate table](https://better.com/start) to see where yours lands you, and for more details, learn [how your credit score affects your mortgage](https://better.com/content/how-your-credit-score-affects-your-mortgage/). 

## How Stacey Foley saved on her home and invested in her family

![Abstract Mustard Yellow Image with Circular Photo of Two Homeowner's Embracing Within](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fb5a81c37018240b5af635025d823c479)

<br>

Refinancing can help lower your monthly payment, tap into your home equity, or reset your loan terms altogether. It can also provide extra cash to help support the people who matter most. For 57-year-old homeowner Stacey Foley, that’s her family. 

Last month, after living in her Stony Point, North Carolina home for two years, Stacey found out that her monthly mortgage payment of $890 would be going up to $1,010 a month. As a veteran of the banking and lending industry, she knew that refinancing could reduce the amount—and with today’s low mortgage rates, that now was a good time to make the move. “Coming from the industry, I knew it was the best time for us. We hadn’t put that much into the house to worry about,” she says. 

By refinancing with Better Mortgage, Stacey cut back her monthly payment even further, to just $800. That now saves her $210 each month, and roughly $2500 a year. So far, the extra cash has helped pay off an auto loan for her boyfriend’s vintage corvette, and set up some funds for her three new grandchildren due this winter. “This whole thing was a godsend… to save all this money,” she says. 

Mortgage rates are [close to September 2020 lows](https://better.com/content/rates-remain-low-but-could-rise-from-here), but expected to rise for the rest of the year. Many homeowners could still stand to save on a refinance, so [seeing your rates](https://www.better.com/start) today may be a good idea. For more, read up on how to know [when it’s a good time for a new loan](https://better.com/content/is-it-a-good-time-to-refinance/).  

#### Considering a home loan?

Get your custom rates in minutes with [Better Mortgage](https://better.com/). Their team is here to keep you informed and on track from pre-approval to closing. 

<br>

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Homeowner credit scores are at their highest in 15 years, and with new Fannie Mae rules, they could go further on a refinance application.

Homeowner Credit Scores Are At A Record High

Blog post image for Homeowner credit scores are at a record high

Homeowner credit scores are at a record high

![Real Estate Trends from Better Week of September 23, 2021](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F328eaef37d4c4f0eb9270c18507f9b11)

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## Capturing the growing first-time homebuyer market

- First-time homebuyers are leading the market, with Better Mortgage seeing a 132% YoY increase in this category. 
- Better Mortgage is seeing an 87.5% YoY increase in single people seeking sole ownership when applying for mortgages.
- Before the pandemic 8% of Better Mortgage applicants were single, now 15% of borrowers applying to Better are single. 

## Target first-time and single home buyers

First-time and single buyers continue to be consistently active in markets around the country: 

- Previously reluctant to enter the market, Millennial and Gen Z first-time buyers may be motivated by hopes of more inventory and looming interest rate increases. 
- According to [Forbes](https://www.forbes.com/sites/brendarichardson/2021/03/11/single-women-are-propping-up-the-first-time-home-buyer-segment/?sh=2d6f4222526d "external"), “single women are proving to be a powerful force in the housing market, accounting for ownership of about 5.2 million homes, while single men own about 3.6 million homes in America’s 50 largest metros.” Agents who invest in connecting with this single buyer category via social media and networking (virtual and in-person) may have more success in netting new clients than agents solely focusing on move-up buyers. 

## Upcoming market variables

Brendan Phillips, Capital Markets at Better, looks at the variables in the market that could impact that growing number of single homebuyers: "It really depends on the path of rates, which is pretty binary. If a bunch of bad stuff happens (think: new covid variant that can infect vaccinated people very easily) you could see homebuyers receding a bit, and refinancers dominating the market again because rates would stay low.” But if the economic fundamentals are positive, Phillips predicts a different outcome.“If we get a bunch of growth and people are back to work, homebuyers will become a huge part of the market.” And first-time homebuyers, he says, would be significant in this scenario thanks to 2 key market variables. 

Firstly, changes to the federal credit requirements are making it really easy for first-time homebuyers to finance. “There’s the new Fannie Mae rental payment history change, new median credit score calculation change, and potential tax credits that may be approved as part of the infrastructure bill—all these factors are designed to help put first-time homebuyers in homes.” On top of that, industry trends indicate an increase in homebuying—the [Mortgage Bankers Association](https://fortune.com/2021/08/03/us-household-debt-15-trillion/#:~:text=Household%20debt%2C%20which%20includes%20mortgages,Americans'%20balance%20to%20%2414.96%20trillion.&text=Overall%2C%20mortgage%20debt%20now%20stands%20at%20%2410.4%20trillion "Mortgage Bankers Association") forecasts that residential mortgage debt (currently $11.1 trillion) will increase to $12.4 trillion by the end of 2022. 

## What we are seeing at Better Mortgage

-  Better Real Estate Agent Pamela Rich in Seattle points to the increasing trend of co-living:  “I’m seeing lots of single professionals get great deals on two-bedroom condos and taking on a roommate.” 

Sole purchasers are acquiring real estate at historic rates:  Better Mortgage is seeing an 87.5% YoY increase in single people seeking sole ownership when applying for mortgages. In June 2020 only 8% of Better applicants were single applicants. By June 2021, 15% of Better Mortgage customers were single homebuyers. Additionally, 70% of Better Mortgage applicants do not have a co-borrower, a number that rose nearly 10% this year to a new high.

![Stacked bar chart graph of co-borrower and sole purchaser trends from May 2021 to August 2021](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F19cee7c17bd14b59ae00576055cfd533)

<br>

First-time homebuyers are leading the market. Better Mortgage has seen a 132% YoY increase (August 2020-August 2021) in first-time homebuyers. 

![Trend lines graph of first-time homebuyer mortgage applications from September 2020 to August 2021](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F65a28f384ecf4340a6a6332746c932b5)

<br>

## What real estate agents can do next

- Create a social media marketing plan targeted exclusively at first-time single buyers
- Contact clients for referrals specifically asking for first-time homebuyers they know entering the market 
- Make single buyers a niche specialty and promote across your social channels, websites, and existing client databases. 

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Agents who invest in connecting with first-time homebuyers and single borrowers may see increased success in netting clients.  

Capturing The Growing First-Time Homebuyer Market

Blog post image for Capturing the growing first-time homebuyer market

Capturing the growing first-time homebuyer market

![Mortgage News: Rates Remain Low, But Could Rise From Here](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fcdeb80b34e1a4aab8d67dc086a8ceb83)
<br> 

Here’s a look at the latest developments in the refinance market this week.

## Rates are close to September 2020 lows—but they could rise from here

![Double Line Graph: 2020 vs 2021 Freddie Mac PMMS Rates](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F4c3bebbeacb64a72b8f1e3419eef02ee)
<p class="legal">Source: <a href="http://www.freddiemac.com/pmms/">Freddie Mac PMMS</a></p>

<br>

The market has kept rates steadily low over the last couple of months, with the 30-year fixed rate mortgage moving only 0.01% last week [to 2.88%](http://www.freddiemac.com/pmms/ "external"). A [healthy economy usually means higher rates](https://better.com/content/what-affects-mortgage-rates/), but a new wave of COVID cases and lower-than-expected employment have stalled the country’s growth. 

Mortgage rates are in roughly the same place they were at this time in September 2020, when the 30-year fixed rate was just 0.02% away, at [2.86%](http://www.freddiemac.com/pmms/ "external"). Instead of dropping further, they’re [expected to rise this year](https://finance.yahoo.com/news/housing-market-forecast-rest-2021-210003957.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAANu9mEZdj2nVO6bjn_kojz40vVPQO_M553l3kHJM-nY2J_pskFbiJZQR2K4LAkCWwgHQLqE-nI2FchRUMYcQaY52obLv4XMGjnQNQ3QPC8Um9wNjmPKqZbasrsgcArS24lxtB_bO4Cec2zIsr1Jw8wSWVWcXhM2SzdLoiWVWwWwd "external"). Better Mortgage analysts expect rates to start ticking up by mid-autumn, but remain below 3.25% in 2021. 

If you’re buying a home, it may be a good idea to lock in a rate quickly before they can rise. Get started by seeing [today’s rate table](https://better.com/start) to find out what you’d pay each month. If you’re not sure how to choose the best option for you, read [our guide to comparing mortgage rates](https://better.com/content/what-to-look-for-when-comparing-mortgage-rates/). 

## With the market short over 5 million homes, price gains reach another record high

Prices continue to climb as the home supply gap grows larger. Home price gains hit a record high of [18% year-over-year in July](https://www.corelogic.com/intelligence/u-s-home-price-insights/ "external"), with the national median asking price at [$385,000](https://www.realtor.com/research/weekly-housing-trends-view-data-week-sept-4-2021/ "external"). Low inventory is driving the price hike, since there are now more households in the country than there are homes. The U.S. Census found that [12.3 million American households](https://www.cnbc.com/2021/09/14/america-is-short-more-than-5-million-homes-study-says.html "external") were formed from January 2012 to June 2021, but just 7 million new single-family homes were built during that time.

Higher prices mean higher costs, including real estate commissions. A traditional real estate agent will take 5-6% of the home’s sale price, which can amount to $15,000 on a $250,000 home sale price. Better Real Estate Agents are salaried and don’t take a commission, which saves both the buyer and seller money. Learn more about [agent commissions and why you shouldn’t pay them](https://better.com/content/why-you-shouldnt-pay-real-estate-commission). 

## How Melany Anderson saved on a family home with Better Mortgage

![Photograph of Melany Anderson and 6-year-old Daughter Sourced from New York Times Article Published September 18, 2020](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Feadf23248359418aa50118a5aa9cf2bf)
<p class="legal">Source: <a href="https://www.nytimes.com/2020/09/18/business/digital-mortgages.html">NYTimes</a></p>

The digital tools and services at Better Mortgage help save customers money by cutting out a number of unnecessary loan fees. That came in handy when Melany Anderson, a pharmaceutical consultant from West Orange, New Jersey, set out to buy a home. 

After going through a rough divorce that put a strain on both her bank account and credit score, Melany was pushed to buy a home when her 6-year-old daughter asked why she didn’t have her own room where they were living. That put her on the path to becoming a homeowner—she slowly rebuilt her credit, saved up her income, and took money from her 401K to use on a down payment. 

Melany worked with Better Mortgage to buy a two-bedroom home with a modern kitchen, deck, and backyard in November 2019. She never had to step foot in a bank, and in the end, only paid $4,000 in fees—roughly [half the national average](https://www.urban.org/sites/default/files/publication/100533/fintech_innovation_in_the_home_purchase_and_financing_market_0.pdf "external"). Now she’s proud to be financially stable for her daughter, and Better Mortgage is proud to have helped her get there. 

There are a number of fees that come with a new home, but choosing the right lender and loan options can reduce them. Read up on which [mortgage costs you should (and shouldn’t) pay](https://better.com/content/cost-and-lender-fees-in-mortgage-process/). 

#### Considering a home loan?

Get your custom rates in minutes [with Better Mortgage](https://better.com/). Their team is here to keep you informed and on track from pre-approval to closing. 

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Rates are close to the lows of September 2020, giving today’s homebuyers a chance to save on their mortgage before they’re expected to rise. 

Rates Are Still Low On A New Home

Blog post image for Rates are still low on a new home

Rates are still low on a new home

![Mortgage News: A Starter Home Could Be Cheaper Than Rent](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F6f82a2be78e14479842081c0d037d8e8)

<br>

Here’s a look at the latest developments in the refinance market this week.

## It’s cheaper to buy than rent in nearly half of the country’s biggest cities

While rental prices have risen over the last few months, mortgage rates have remained low. Now, today’s homebuyers can get a starter home for less than the cost of renting in [24 of the 50 largest U.S. cities](https://sports.yahoo.com/buying-starter-home-cheaper-rent-070009238.html "external"). 

A starter home is defined as a studio, one-bedroom, or two-bedroom dwelling, and their prices can vary. 

In July, the national average rent increased [10% year-over-year](https://sports.yahoo.com/buying-starter-home-cheaper-rent-070009238.html), while the 30-year fixed rate mortgage continued to sit [close to historic lows below 3%](http://www.freddiemac.com/pmms/ "external"). For example, in Birmingham, the average monthly cost for a home was $728, which was [33% less than its median monthly rent of $1,089](https://magazine.realtor/daily-news/2021/08/27/starter-homes-still-cheaper-than-renting-in-many-areas "external"). That saves homeowners $361 a month and over $4,000 a year.
If you’re open to relocating, it may be worth taking a look at our [roundup of the most affordable cities to buy in](https://better.com/content/most-affordable-cities-in-the-us/). They each have a lower cost of living that aligns with home prices and household incomes in the area. 

Buying a home can do more than just save you money. You could gain home equity, which you can access with [cash out with a refinance](https://better.com/content/cash-out-refinancing-gives-you-options/). Figure out if it’s time to make the move with [help from these tips on renting vs. buying](https://better.com/content/should-i-rent-or-buy/). 

## Extreme weather is getting more frequent. Do you have the insurance you need? 

As the [impact of climate change](https://www.washingtonpost.com/climate-environment/2021/07/03/climate-change-heat-dome-death/ "external") continues to worsen around the country, storms and major weather events are becoming more frequent. If you want to protect your home and its financial value, it’s important to have insurance that fits your needs. 

[Homeowners insurance](https://better.com/content/why-do-i-need-homeowners-insurance) covers losses and damages that occur to or on your property. Your policy can provide the funds to make repairs or replacements and protect you from certain liabilities. While it may seem like an extraneous cost when things are going well, its value is undeniable when they’re not. 

Most people pay around [$90 a month](https://www.lemonade.com/blog/homeowners-insurance-cost/ "external") for homeowners insurance, though it depends where you live and what you need. Many types of damage like wind, hail, and lightning, are covered under a standard homeowners insurance policy. But some events fall under a separate deductible, like flooding. Just an inch of water can bring up to [$25,000 in damage](https://www.cnbc.com/2021/08/31/how-homeowners-can-be-financially-prepared-ahead-of-storms-like-ida.html "external"), so it may be worth getting an additional policy to make sure you’re protected. 

Read up on [all things insurance](https://better.com/content/all-things-insurance) to figure out what you need for your home, and how to get it. If you’re looking for a fast insurance experience that’s entirely online, head to [Better Cover](https://better.com/hoi) to see how they can help. 

## Why Tess Silwa chose to buy her first home with Better Mortgage

Better Mortgage is proud to be a digital-first mortgage lender, because it helps them communicate quickly and efficiently with everyone they work with. That’s part of what drew Austinite Tess Silwa to the company when she decided it was time to buy her first home. 

Tess began house hunting with her partner in 2019. When browsing for lenders online, she was instantly impressed by Better Mortgage’s competitive rates. Tess says she decided on Better because the team was responsive and helpful, and didn’t make her feel like she had to come in knowing the loan process already, as so many other lenders had. If you’re new to homeownership and not sure what’s next, get a lay of the land with the [8 steps to buying a home.](https://better.com/content/steps-to-buying-a-house) 

## Considering a home loan?

Get your custom rates in minutes with [Better Mortgage](https://better.com/). Their team is here to keep you informed and on track from pre-approval to closing. 

<br>

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Rent is climbing in major cities while mortgage rates are still low, creating more opportunities for buyers to save money on a starter home.

A Starter Home Could Be Cheaper Than Rent

Blog post image for A starter home could be cheaper than rent

A starter home could be cheaper than rent

![Real Estate Trends from Better Week of August 16, 2021](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F86a928dd47684566b3223665cb125cbf)

<br>

Here’s a look at the latest developments in the real estate market.

<ul>
<li><strong>According to Realtor.com we can expect to see a market “tilted back towards buyers” beginning this fall.</strong></li>
<li><strong>CNBC reports inventory of new homes for sale jumped from a 5.5-month supply in May to a 6.3-month supply in June. </strong></li>
<li><strong>WFH trends are ending as two-thirds of Manhattan office employees are expected to return to the office.</strong></li>
</ul>

Danielle Hale, Chief Economist at Realtor.com, is somewhat optimistic about the home buying season this fall. “The trends I see happening are a market which is tilted back a bit more evenly towards buyers,” Hale explains. 

Having said that, she also cautions buyers to not get too excited just yet. "Homes are still selling quickly, but not as fast as they have been. I still believe prices will rise, just not at the double-digit increases we've seen for 2021. I also think some buyers may drop out of the market if we see mortgage rates rise as many people are already at the [top of their budget.](https://better.com/content/how-to-help-clients-avoid-buyers-remorse)” 

Hales cautions buyers to “stay prepared by having all your pre-approval financing in place.” She also advises buyers and their agents to keep setting alerts on properties that fit specific search criteria so once those listings hit the market agents can act quickly and help buyers [make competitive offers](https://better.com/content/how-to-get-an-offer-accepted-in-todays-market).

Redfin recently reported good news for buyers. “Like a slow turning ship, the housing market’s supply side is gradually gaining momentum as homes for sale begin to pile up and pending sales continue a steady and seasonal decline. As both of these trends continue in the weeks ahead, prices will stop rising as rapidly as they have been and an increasing number of homes for sale will likely see price drops.”

#### Home Sale Prices Up 20% From 2020 
4-week rolling average of the median sale price of homes sold

![Line Graph of Home Sales Prices January 2019 Through July 2021](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F79336c9280f74e15a30b08c262f96560)

<p class="legal">Source: Redfin</p>

Better Real Estate Agent Ray Markey reports some good news for buyers in parts of New Jersey. “Inventory is increasing in Southern New Jersey including Camden and Gloucester. I feel a shift in the last four weeks.”

## Industry Trend

According to [The National Association of Realtors](https://fred.stlouisfed.org/series/MEDDAYONMARUS "external"), the US Existing Home Median Sales Price is at a current level of $363,300, up from $350,400 last month and up from $294,400 one year ago. This is a change of 3.68% from last month and 23.40% from one year ago. The speed of homebuying has also changed, with buyers moving more quickly than they did even at the beginning of this year: average days on market for June  2021 hit 37 days, down from 76 days in January.

#### Housing Inventory: Median Days on Market in the United States

![Trend lines graph of average days houses are on market in the US from January 2017 to July 2021](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F721f529d71b440c8bc5cfa77d1b4bc7a)

<p class="legal">Data source: realtor.com</p>

While home prices are still up and purchase timelines are still urgent, there is some positive news for buyers on the horizon: bidding wars have cooled down since since April. Though [competition among would-be homebuyers is still hot](https://better.com/content/be-ready-for-bidding-wars-in-todays-market), the recent increase in home supply has [reduced the amount of bidding wars by 7% in June](https://www.redfin.com/news/real-estate-bidding-wars-june-2021/ "external") compared to May, according to Redfin.

Better Real Estate Agent Jack Mager reports activity in the Maryland market, saying, “Days on market in central Maryland are slightly increasing, but not due to more inventory which is still very low. It’s due to a steep increase in prices in all price segments.” However, Mager does concede a promising market shift for buyers. “Some pockets are slowing down overall.”

In the primary mortgage markets, rates for a 30-year Fixed rate mortgage were at 2.81% recently according to MND’s Daily Rate Survey. 

#### “Crack in Pandemic Housing Boom.”

Major business media is also reporting a crack in the pandemic housing boom. [According to a CNBC report](https://www.cnbc.com/2021/07/26/housing-boom-is-over-as-new-home-sales-fall-to-pandemic-low.html "external"), the “housing boom is over as new home sales fall to pandemic low.” Reading beyond the headlines, the report points to a key indicator—inventory. “The inventory of new homes for sale jumped from a 5.5-month supply in May to a 6.3-month supply in June.” Most importantly, “last fall it sat at a low of just 3.5 months.”

#### Work From Home Winds Down 

According to the [Real Estate Board of New York](https://www.rebny.com/content/rebny/en/newsroom/press-releases/2021_Press_Releases/As_New_Yorkers_Return_to_the_Office_Real_Estate_Industry_and_Labor_Release_Safety_Guidelines_for_Commercial_and_Residential_Buildings.html "external"), “nearly two-thirds of Manhattan office employees expected to return to the workplace by the end of September.” James Gorman, CEO of Morgan Stanley, recently commented on a [Wall Street Journal Podcast](https://www.wsj.com/podcasts/the-journal/wall-street-ceos-say-working-from-home-isnt-working/e4f0de44-4d2e-4cd9-8e8c-0d569bae291d "external"), saying “At Labor Day, I’ll be very disappointed if people haven’t found their way into the office.” When Jamie Dimon, CEO of JP Morgan, was asked how WFH worked for his company, Dimon replied, “It doesn’t work for our culture.”

#### What real estate agents can do next:

- Prepare a fall marketing plan that includes a list of potential sellers to contact.
- Create a fall market e-news blast or e-newsletter for distribution and website content.
- Reconnect with buyers who took a summer or vacation break from actively looking at property.

You can also schedule a call with an Agent Experience Partner to learn how you can save your next client $2,000*.

<br>

 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/agents">Schedule a call</a>  
 </div>

<br><br><br><br>

<p class="legal"><a href="https://welcome.better.com/agent-referral/terms/">Terms and conditions apply.</a></p>

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As bidding wars cool off and home prices begin to level out, buyers who took a break this summer might be ready to dive back in. 

Preparing Homebuyers for a Favorable Fall

Blog post image for Preparing Homebuyers For A Favorable Fall Housing Market 

Preparing Homebuyers For A Favorable Fall Housing Market 

![Mortgage News: A Fannie Mae Change Could Help Homeowners Save](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F9c37f0d143b74b04b9829e84e13e5eb9)

<br>

## Here’s how your credit score could go further on a refinance

On September 18th, [Fannie Mae is rolling back restrictions](https://guide.freddiemac.com/app/guide/bulletin/2021-28?utm_source=eloqua&utm_medium=email&utm_campaign=2021-08-11_POLICY_Guide-Policy&elqTrackId=747C89626F11F8DD6608D507513F79CC&elq=3c2cd261068e4b0598a1b73e455c6b5b&elqaid=10401&elqat=1&elqCampaignId=9764) that impact how lenders evaluate credit scores. Instead of considering only the lowest of two FICO scores between a primary and co-borrower, lenders will now be able to combine them for an average score. That means you’ll be represented by either the same score or higher when applying to a Fannie Mae-backed lender like Better Mortgage. 

Your credit score is a large part of how lenders evaluate your ability to pay back a loan. The higher your score, the lower the rate you likely qualify for—which means more savings on a refinance. It also affects the price of your mortgage insurance, which is required if you make a down payment less than 20%. Get a sense of [how your credit score affects your mortgage](https://better.com/content/how-your-credit-score-affects-your-mortgage/), and how to improve it before applying.

This change is coming just in time as mortgage rates begin to tick upward. America’s most popular home loan, the 30-year fixed rate mortgage, [reached 2.87% last week](http://www.freddiemac.com/pmms/). That’s not far from its all-time low of [2.65%](https://www.washingtonpost.com/business/2021/01/07/fixed-mortgage-rates-sink-lowest-levels-history-could-be-headed-higher/), but it is a 0.10% jump from the week before. 

The market drove rates up in response to the country’s latest jobs report. Employment and wages are increasing, and a [healthy economy usually means higher mortgage rates](https://better.com/content/what-affects-mortgage-rates/). It may help to move quickly on your refinance before they can rise further, so [see what today’s rates mean for your budget](https://better.com/start). 

## Considering a home loan?
Get your custom rates in minutes with [Better Mortgage](https://better.com). Their team is here to keep you informed and on track from pre-approval to closing. 

<br>

 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/start">See your rates</a>  
 </div>
<br><br>

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Lenders will evaluate credit scores differently starting September 18th, and homeowners may be in a position to save even more on their next refinance.

A Fannie Mae Change Could Help Homeowners Save

Blog post image for A Fannie Mae change could help homeowners save

A Fannie Mae change could help homeowners save

![Mortgage News: What The End Of The Foreclosure Ban Means For Homeowners](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F16fbc9cba35548fd899ee2a091e13f76)

<br>

Here’s a look at the latest developments in the mortgage market this week. 

<ul>
<li><strong>The foreclosure ban just ended. Here’s what it means for homeowners.</strong></li>
<li><strong>Bidding wars are cooling down, but prices are still hot</strong></li>
<li><strong>Mortgage rates linger near historic lows</strong></li>
<li><strong>FHA or Conventional—which loan is best for you?</strong></li>
</ul>

## The foreclosure ban just ended. Here’s what it means for homeowners.

On July 31st, the government ended its [federal moratorium on foreclosures](https://www.inman.com/2021/07/31/eviction-and-foreclosure-bans-end/ "external"), putting more pressure on homeowners in forbearance to catch up on missed payments. That number of owners has dropped by half since the pandemic began, now accounting for 2.1 million households. If you’re currently in a forbearance plan, or behind on payments, there are a few routes you can take to get on your feet and remain in good standing with your lender. 

Mortgage forbearance is a way to put your loan payments on pause with the approval of a lender or bank. When the period ends, homeowners are required to resume their monthly payments and make up the ones they missed, with interest. 

With [an FHA loan](https://better.com/content/what-is-an-fha-loan/) or federally funded mortgage, homeowners can extend forbearance plans for up to 18 months. If your mortgage falls in that category and you haven’t hit the limit, you could apply for a 3-month extension for more time. 

Selling your home could also provide the influx of cash required to start fresh. Over [a million homeowners were rescued](https://www.nationalmortgagenews.com/articles/u-s-housing-boom-rescues-more-than-1-million-underwater-homes "external") from debt in the last year and a half just by selling their home. If you’re ready to make the move, you may be able to list with [Better Real Estate](https://better.com/realestate) and pay less than you would with a traditional brokerage. 

With [today’s 30-year fixed rate near a historic low](http://www.freddiemac.com/pmms/ "external") and [millions in a good position to save](https://time.com/nextadvisor/mortgages/mortgage-news/do-you-qualify-to-save-on-refinance-loan/ "external"), refinancing may be the best option. A new home loan gives you the chance to reset your terms entirely, or lock in a lower interest rate and monthly payment. You could even tap into your home equity with a [cash-out refinance](https://better.com/content/cash-out-refinancing-gives-you-options/). Over the last year, home equity around the country rose by a record [$33,400 per homeowner](https://www.cnbc.com/2021/06/10/homeowners-got-2-trillion-richer-during-first-three-months-of-2021.html "external") on average. See [how to calculate your home equity](https://better.com/content/home-equity-vs-refinance/), and read through [our guide to refinancing](https://better.com/content/is-it-a-good-time-to-refinance) to learn if it’s the right move for you. 

No matter which direction you take, it starts with [seeing your rates](https://better.com/start). That way, you know where you stand as a homeowner—and what you could be saving. 

## Bidding wars are cooling down, but prices are still hot

With [more inventory](https://better.com/content/how-to-get-an-offer-accepted-in-todays-market) hitting the market, [bidding wars are on the decline](https://www.inman.com/2021/08/03/bidding-wars-are-cooling-off-how-to-prepare-for-a-shift-2/ "external") for the second month in a row, this time by [7% from May to June](https://www.redfin.com/news/real-estate-bidding-wars-june-2021/ "external"). That’s good news for shoppers who are dealing with tough competition, but with prices still at record highs, it may not be felt in every corner of the market. 

Existing home prices have jumped 23% over the last year, reaching a record median price of [$363,000](https://www.wsj.com/articles/median-existing-home-price-hit-new-high-in-june-11626963073#:~:text=June%20sales%20rose%2022.9%25%20from,price%20increases%20amid%20limited%20inventory. "external"). Even without a bidding war, making sure your offer stands out to sellers is important.. 

Boost your odds of an accepted offer with the [Better Appraisal Guarantee](https://welcome.better.com/better-appraisal-guarantee/).* It locks in your loan terms regardless of a home’s appraisal, so you don’t take any risk by waiving [the appraisal contingency](https://better.com/content/appraisal-contingency/). Sellers are 50%** more likely to pick a guarantee-backed offer, and all it takes to get started is talking to a Better Real Estate agent. [Find one in your area here](https://better.com/with/find-an-agent?leadSource=betterappraisalguarantee). 

## Mortgage rates linger near historic lows

The market drove mortgage rates down last week, due to a heightened sense of uncertainty around the pandemic and new variants. The [30-year fixed rate hit 2.77%](http://www.freddiemac.com/pmms/ "external") which is a 0.11% drop from where it was at this time last year. 

Rates this low spell good news for homebuyers and homeowners alike. And given how much closing costs can also impact the price of a loan, a no-cost mortgage could be a great way to save even more. This loan type rolls your closing costs into the total loan amount, so you don’t have to pay as much upfront. [Find out if a no-cost mortgage](https://better.com/content/no-cost-mortgage) is the right move for you. 

## FHA or Conventional—which loan is best for you?

Choosing a loan is about more than just what you qualify for. It depends on your priorities as a borrower, the kinds of risks you’re comfortable taking, and what you have planned for your homeownership timeline. FHA and Conventional loans are both popular, but come with different eligibility requirements, insurance costs, and availability. Find out which one is a better fit for you by following our [step-by-step guide to choosing between an FHA or Conventional loan type](https://better.com/content/fha-vs-conventional-loans). 

## Considering a home loan?

Get your custom rates in minutes with [Better Mortgage](https://better.com/). Their team is here to keep you informed and on track from pre-approval to closing. 

<br>

 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/start">See your rates</a>  
 </div>
<br><br>

<p class="legal"><a href="https://welcome.better.com/better-appraisal-guarantee/">*See Better Appraisal Guarantee terms and conditions</a> 
  <br> **Results based on a survey of 104 real estate agents in competitive markets. Of those surveyed, more than ~60% responded that waiving the appraisal contingency could increase the likelihood of having a competitive offer accepted by 50% or more. Results may vary and are not intended to represent or guarantee that anyone will achieve the same or similar results.</p>

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The foreclosure ban has ended. Find out what it means for millions of homeowners, the choices you face now, and how to safeguard your home today.

What The End Of The Foreclosure Ban Means

Blog post image for What the end of the foreclosure ban means for homeowners

What the end of the foreclosure ban means for homeowners

![Mortgage News: How First-Time Buyers Can Compete As Prices Rise](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fe914f1f489d64d82bb4bf1ecd4d130a7)

<br>

Here’s a look at the latest developments in the mortgage market this week. 

<ul>
<li><strong>First-time buyer? Here’s how to avoid getting priced out.</strong></li>
<li><strong>More homeowners refinance while rates hover at a six-month low</strong></li>
<li><strong>New construction home sales dip as lumber costs rise</strong></li>
<li><strong>What is an escrow account?</strong></li>
</ul>

Anyone searching for a home today is up against rising prices, bidding wars, and intense competition. But the path to homeownership tends to be extra bumpy for first-time buyers, because they enter the market with smaller budgets and no home equity. In July, [37% of first-time buyers](https://www.inman.com/2021/07/16/first-time-buyers-still-eager-despite-snags-on-path-to-homeownership/ "external") said they had to set back their homebuying timeline after losing income during the pandemic. 

Instead of hitting pause on your search, there are some loan options that could help you compete for a home—without putting more money on the table. 

#### Make a lower down payment

It takes a [year longer to save for a 20% down payment](https://www.wkrn.com/news/local-news/reports-first-time-buyers-need-year-longer-to-save-for-20-percent-down-payment-compared-to-5-years-ago/ "external") than it did 5 years ago, which may be why [35% of buyers](https://www.nar.realtor/sites/default/files/documents/2020-downpayment-expectations-and-hurdles-to-homeownership-report-04-16-2020.pdf "external") cite it as their primary roadblock to owning a home. But 20% down isn’t always required—and last year, [roughly two-thirds of first-time buyers](https://www.zillow.com/research/how-long-to-save-a-down-payment-29735/ "external") put down less than that. 

With an [FHA loan](https://better.com/content/what-is-an-fha-loan/), you could put as little as 3.5% down on a home and still lock in competitive rates. These mortgages carry more lenient qualifying guidelines than conventional loans, especially when it comes to savings and credit scores, so it’s worth finding out [if it’s the right option for you](https://better.com/content/fha-loan-requirements/ "external").

#### Improve your debt-to-income ratio

Saving for a home can be tough to balance alongside student loan debt, which accounts for [20% of the decline](https://www.federalreserve.gov/publications/files/consumer-community-context-201901.pdf "external") in homeownership among young adults. But the reality is, lenders don’t look at how much student debt you have in total. They look at how you’re paying it down each month, typically through your debt-to-income (DTI) ratio. Learn [how to assess your DTI](https://better.com/content/what-is-a-good-debt-to-income-ratio/) to see where you stand, and raise your chances of [getting approved for a mortgage with student loans](https://better.com/content/getting-a-mortgage-with-student-loans/). 

#### Get the Better Appraisal Guarantee

Negotiating with a seller doesn’t always mean putting more cash on the table. [Waiving your appraisal contingency](https://better.com/content/appraisal-contingency/) can boost your odds of an accepted offer by 50%.* Normally, you’d risk losing your lender or having to change your loan terms. But with the [Better Appraisal Guarantee](https://welcome.better.com/better-appraisal-guarantee/), you could get the loan terms you locked no matter what the appraisal says.** 

Even with historically low inventory, first-time buyers still have a place in today’s market. And with mortgage rates as low as they are, it’s worth taking a look at what you can afford. [Crunch the numbers with our affordability calculator](https://better.com/content/a-better-home-affordability-calculator/) to see what a new home could look like with your budget. 

## More homeowners refinance while rates hover at a six-month low

Last week, the [30-year fixed rate average ticked up to 2.80%](http://www.freddiemac.com/pmms/ "external"). Even with the increase, the rate is at a 6-month low and still only 0.15% away from an all-time low of 2.65%. [Millions of homeowners](https://time.com/nextadvisor/mortgages/mortgage-news/do-you-qualify-to-save-on-refinance-loan/ "external") stand to save on a refinance, and many are taking note. Refinance applications have [jumped up 9% week-over-week](https://www.cnbc.com/2021/07/28/mortgage-rates-at-six-month-low-and-refinances-shoot-up.html "external") around the country. 

A refinance can lower your mortgage rate and monthly payments, and provide other benefits too. Whether you want a shorter loan term, an influx of cash, or fewer debt payments, getting a new loan can make it happen. [Find out how a refinance could help](https://better.com/content/6-reasons-to-refinance-your-mortgage/) you reach your financial goals, and [check your rates](https://better.com/start) to see how much lower your payments could be. 

## New construction home sales dip as lumber costs rise

Rising home prices are [tamping down the demand](https://better.com/content/how-to-get-an-offer-accepted-in-todays-market/) for new construction homes, and June saw the [lowest number of new home sales](https://www.cnbc.com/2021/07/26/housing-boom-is-over-as-new-home-sales-fall-to-pandemic-low.html "external") since April 2020. The price spike is thanks to a shortage in softwood lumber, which increased in cost by [over 300% during the pandemic](https://www.cnbc.com/2021/07/19/homebuilder-confidence-slips-in-july-as-construction-costs-rise.html "External"). Now it costs roughly 75% more than it did in 2019, but builders have had to raise their prices to keep up. 

It can be tough to bargain down the price of a newly built home. Instead, it may be easier to negotiate with a builder through upgrades to the home itself. Choose materials from their showroom that would add value to the property, like hardwood floors, or marble countertops. If you want to learn what to look out for, avoid, and prepare for in a new home sale, [read our quick and easy Q&A](https://better.com/content/buying-a-new-construction-home/). 

## What is an escrow account? 

Escrow accounts are specifically designed to hold money meant for home costs, whether it’s during the sale itself or throughout the course of a mortgage. They usually come into play after a loan is finalized, but it helps to know what they are beforehand too. [Get to know the ins and outs of escrow accounts](https://better.com/content/what-is-an-escrow-account/)—from what they are, to how they work, to why opening one could help protect your mortgage. 

## Considering a home loan?

Get your custom rates in minutes [with Better](https://better.com/) Mortgage. Their team is here to keep you informed and on track from pre-approval to closing. 

<br>

 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/start">See your rates</a>  
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<br><br>

<p class="legal">*Results based on a survey of 104 real estate agents in competitive markets. Of those surveyed, more than ~60% responded that waiving the appraisal contingency could increase the likelihood of having a competitive offer accepted by 50% or more. Results may vary and are not intended to represent or guarantee that anyone will achieve the same or similar results.</p>

<p class="legal"><a href="https://welcome.better.com/better-appraisal-guarantee/">**See Better Appraisal Guarantee terms and conditions</a></p>

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First-time homebuyers are getting left behind as home prices skyrocket. Follow these tips to improve your standing, without putting more money down.

How First-Time Buyers Can Compete As Prices Rise

Blog post image for How first-time homebuyers can compete as prices rise

How first-time homebuyers can compete as prices rise

![Mortgage News 1/04/2021: Why 2020 Was the Year of the Home](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Ffbd69199dd804a1783589af2bfde3951)

<br>

Here’s a look at the latest developments in the mortgage market for the week beginning 1/4/21. 

<ul>
<li><strong>How Better Mortgage helped make 2020 the year of the home</strong></li>
<li><strong>More homeowners opt to defer or lower their payments amid financial struggles</strong></li>
<li><strong>Prices rise in middle America as buyers flee coasts</strong></li>
<li><strong>A guide to the underwriting process</strong></li>
</ul>

<h2>How Better Mortgage helped make 2020 the year of the home</h2>

To say that 2020 was a major year for homeownership would be an understatement. In the middle of a global pandemic, homes became more than just living spaces—they were offices, gyms, schools, creative studios, and more. Millions of people chose to buy or refinance in the last year, and Better Mortgage alone took on over 88,000 new clients, funding [over $20B in home loans](https://better.com/content/year-of-the-home-2020-review/). 

It was a historic year for interest rates. Due to intervention by the Federal Reserve, rates fell below previous records over a dozen times. Better Mortgage was able to offer competitive Market Rates, often lower than Freddie Mac PMMS rates, even as those benchmarks continued to drop.

<h4>Better Mortgage Market Rate* vs Freddie Mac Primary Mortgage Market Survey (PMMS) Rate** (July - December 2020)</h4>

![Graph: Better Mortgage 30 Year Fixed Rate vs Freddie PMMS 30 Year Fixed Rate](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fa702e93a14a5404d88b719d10913dec5)

<p class="legal">This is not a commitment to lend. Interest rates are for informational purposes only.  Details on rate calculations below.</p>  

Economic hardship has been felt everywhere since COVID-19 first emerged in the U.S. in late winter, putting [40 million people out of work by May](https://www.housingwire.com/articles/heres-what-mortgage-forbearance-looked-like-in-2020/ "external"). With interest rates low, many homeowners [took the opportunity to refinance](https://better.com/content/winter-may-be-the-best-time-to-buy-a-home/). Better Mortgage saved clients who refinanced an annual total of over $300M.*** 

On the flip side, the same year saw the demand for homes rise. Many [millennial first-time buyers entered the market](https://better.com/content/millennials-drive-home-sales/), contributing to a home buying boom. As sales rose, however, so did home prices. Better Mortgage met the need for an affordable, transparent home loan experience, and saved 2020 homebuyers an average of $8,200 over the life of the loan.****  

Looking ahead to 2021, the lasting impacts of the pandemic are expected to [keep interest rates low, with a gradual rise](https://better.com/content/expect-rates-prices-sales-to-rise-in-2021/) throughout the year. There is still plenty of time for loan applicants to take advantage though, especially before prices and sales are [expected to climb as the year goes on](https://better.com/content/housing-sales-likely-to-continue-to-climb/). 

(For more on how Better Mortgage impacted the homeownership landscape, check out our [Year in Review](https://better.com/content/year-of-the-home-2020-review/).)

<h2>More homeowners opt to defer or lower their payments amid financial struggles</h2>

Alongside a nationwide vaccine rollout and second economic stimulus package, [2.8 million homeowners ended the year in forbearance](https://www.housingwire.com/articles/black-knight-2020-ends-with-2-8-million-in-forbearance/ "external"). Due to the high demand, the FHA announced they’ve extended the deadline for single-family borrowers to request forbearance up until February 28, 2021. 

For a growing number of homeowners, refinancing may be a more financially viable alternative to forbearance. While forbearance is a short-term measure used to avoid defaulting or foreclosure, [refinancing is an opportunity to renegotiate](https://better.com/content/refinance-vs-forbearance/) the terms of a home loan.

In late December, refinance applications made up [three quarters of all mortgage applications](https://www.housingwire.com/articles/mortgage-applications-increase-for-second-straight-week/# "external"), driving a 124% increase from the same period last year.

<h2>Prices rise in middle America as buyers flee coasts</h2>

Extended work-from-home policies and a desire for more space and comfort [drove an urban flight trend in 2020](https://better.com/content/opportunities-rise-downtown-condo-prices-drop/), as families moved away from tech hubs towards suburbs and smaller cities. 

Now, prices in those historically affordable cities are rising. Mid-American areas like Pittsburgh, Austin, Cincinnati, Cleveland, are seeing [price gains 10% higher](https://www.cnbc.com/2021/01/04/covid-real-estate-home-prices-rise-faster-in-middle-of-us.html "external") than they were last year. 

The shift could result in better deals for buyers in traditionally high-priced coastal markets. For example, [the Bay Area has seen a slower price incline](https://www.mercurynews.com/2021/01/04/bright-outlook-for-bay-area-home-sales-prices-in-2021/ "external") compared with other cities, despite historically high home values. 

<h2>A guide to the underwriting process</h2>

Underwriting is one of the final steps of the loan process, essentially deciding whether or not a home loan is approved. It involves taking a close look at an applicant’s entire financial picture and paying attention to a series of established risk factors.[ Here’s a handy guide](https://better.com/content/underwriting-process/) to what underwriters look for, the documents needed, and a timeline of the process. 

<h2>Considering a home loan?</h2>

Get your custom rates in minutes at [Better.com](https://better.com/). Our team is here to walk you through your options and help you make an informed decision about which loan is right for you.

<br>

 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/start">See your rates</a>  
 </div>

<br><br>

 <p class="legal">*Better Mortgage Market Rates were calculated from an average of rates using the assumptions below to provide a representative offered interest rate for each month. Assumptions include: $200K, $300K, $400K, $500K loan amount; 30-Year Fixed purchase, 30-Year Fixed rate and term refinance; borrower with above average credit (i.e., FICO score of 760 or higher); loan-to-value ratio of 80%; subject property is a Single Family Residence; subject property is borrower’s primary residence; subject property is located in one of our six highest volume metropolitan statistical areas.</p>

 <p class="legal">**Freddie Mac PMMS Rates are the result of surveys to lenders on the rates and points for their most popular 30-year fixed-rate conventional mortgage products, and an origination-weighted average of lender responses. The survey is based on first-lien prime conventional conforming home purchase mortgages with a loan-to-value of 80 percent. This average is widely regarded as the industry standard tracker of mortgage rates week over week.</p>

  <p class="legal">***Annual savings in loan payments for each loan are calculated as the monthly principal and interest payment of the borrower’s prior mortgage less the monthly principal and interest payment on their new loan from Better Mortgage, multiplied by 12 (savings are incurred each month in a year). Individual savings could vary based on current market rates, property type, loan amount, loan-to-value, credit score, debt-to-income ratio and other variables.</p>

  <p class="legal">****The average lifetime savings estimate is based on a comparison of the average interest rate offered by Better Mortgage to prospective borrowers for a $322,000 30-yr mortgage against the Mortgage Bankers Association index from April 2019 to April 2020. Individual savings could vary based on current market rates, property type, loan amount, loan-to-value, credit score, debt-to-income ratio and other variables.</p>

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Mortgage News: 2020 changed the homeownership game, and its effects are still being felt as we head into the new year. 

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