The U.S. housing market is poised for a healthier, more active year in 2026, with major forecasters calling for lower mortgage rates, more home sales, and steady—not runaway—price growth.
A Market Turning the Corner
After several years of low inventory and higher borrowing costs, many economists see 2026 as a turning point rather than a repeat of the recent slowdown. The National Association of Realtors (NAR) projects that existing-home sales could rise by about 14% in 2026, helped by easing mortgage rates and solid job growth. At the same time, NAR expects nationwide home prices to increase around 4%, supported by strong demand and an ongoing shortage of homes for sale.

Mortgage Rates: Gradual Relief, Not a Freefall
Prospective buyers should not expect a return to the ultra-low rates of the pandemic era, but several respected forecasts see meaningful improvement ahead. Fannie Mae’s latest outlook, for example, calls for the average 30‑year fixed mortgage rate to drift down to roughly 5.9% by the end of 2026, after finishing 2025 closer to 6.4%. A separate review of forecasts from Zillow, Redfin, and Realtor. com finds a similar consensus, with many experts expecting rates to average in the low‑6% range in 2026, with occasional dips below 6%.

What This Means for Buyers and Sellers
For buyers, even a modest move from the high‑6% range to around 6% or just under can improve affordability and widen the price range that fits comfortably into a monthly budget. Combined with the expected increase in listings as more owners feel confident about selling, this should create a more balanced, less frustrating experience than the ultra‑competitive markets of the recent past. Sellers, meanwhile, can take some comfort in forecasts that call for continued price growth—not a decline—provided homes are priced realistically and presented well.

Why 2026 Could Be a Planning Year, Not a Waiting Game
The most important takeaway from these forecasts is not to try to “time the bottom” in rates, but to plan around realistic scenarios and personal goals. Whether the average 30‑year fixed rate ends up closer to 6.3% or 5.9%, the broader trend points toward a more stable, predictable lending environment that can support confident long‑term decisions. Working with a knowledgeable mortgage professional can help buyers and homeowners compare options, run payment scenarios, and be ready to act quickly when the right home or rate opportunity appears in 2026.

Buying a home isn’t only about the interest rate — it’s also about how you structure the deal. One of the most overlooked tools is negotiating credits that reduce your upfront costs or improve your monthly payment. When done right, this can make a home purchase feel a lot more comfortable without changing the home you want.
A common strategy is a seller credit, where the seller contributes money toward your closing costs (and sometimes prepaid items like taxes and insurance). Another option is an interest rate buydown, where funds are used to temporarily lower your rate for the first year or two (like a 2-1 buydown). These tools can be especially helpful if you want to preserve cash reserves after moving in.
The key is matching the strategy to your goals. If you’re short on cash for closing, credits may be the cleanest solution. If you expect your income to rise or you plan to refinance later, a temporary buydown can ease the early months of homeownership. Your loan officer can also help you compare “lower rate vs. more credit” options so you’re not leaving money on the table.
For more information, visit our website and schedule a consultation—we’ll help you run the numbers, explore creative ways to reduce upfront costs, and choose a loan setup that fits your budget and timeline.

From early 2022 to mid-2023, the Federal Reserve’s pattern of rate hikes gave way to a pause, announced at their latest meeting on March 20, 2024. Despite this, mortgage rates have fluctuated, including a notable decrease in late December. Lawrence Yun, Chief Economist at the National Association of Realtors, highlights the bond market’s role in adjusting longer-term interest rates in anticipation of future Fed policies. While the Fed plans to cut rates later this year, the exact timing remains uncertain, with an expectation of three rate cuts in 2024.

Understanding the Fed’s Influence on Borrowing Costs
The Fed’s setting of borrowing costs for short-term loans via the federal funds rate impacts various aspects of the economy, including credit card rates and home equity loans. However, fixed-rate mortgages, the most popular home loan type, are more closely tied to the 10-year Treasury yield. The Fed’s buying and selling debt securities indirectly affects mortgage rates by influencing credit flow.

Factors Affecting Mortgage Rates
The primary influencer of fixed-rate mortgages is the 10-year Treasury yield, which fluctuates based on inflation, supply and demand, and the secondary mortgage market. The Fed’s actions also impact Adjustable-Rate Mortgages (ARMs), as they are tied to the Secured Overnight Financing Rate (SOFR), which adjusts based on Fed funds rate changes.

Schedule a Consultation
Navigating mortgage rates amid Fed policy shifts requires expert guidance. Visit our website to schedule a consultation with us to review your needs and determine the best mortgage option for you in today’s market.

In today’s housing market, securing a mortgage approval can be daunting. Rising mortgage rates, escalating home values, and stringent underwriting standards pose significant hurdles for prospective homeowners. In this blog post, we’ll delve into the intricacies of the mortgage approval process, highlight typical obstacles, and provide actionable advice for navigating these challenges.

Understanding the Mortgage Underwriting Process
Mortgage underwriting involves lenders meticulously assessing your financial situation. This process entails thoroughly reviewing your financial documents, including bank statements, tax records, and pay stubs. Automated underwriting systems like Desktop Underwriter and Loan Product Advisor now dominate the process, using algorithms to evaluate applicants’ creditworthiness.

Top Reasons for Mortgage Application Denial
1. Credit Issues: Your credit score is pivotal in mortgage approval. Address errors in your credit report and maintain a favorable score throughout the application process.
2. Income Shortfalls: Lenders scrutinize your debt-to-income ratio to gauge your ability to manage additional debt. Minimize existing debts before applying for a mortgage, especially if you’re self-employed.
3. High Loan-to-Value (LTV) Ratio: Aim for a lower LTV ratio by making a larger down payment, as it enhances your chances of loan approval.
4. Financing Challenges: Certain properties like condos or manufactured homes pose financing difficulties. Address structural issues and property-related concerns to bolster your approval prospects.
5. Recent Financial Instability: Lenders prioritize financial stability. Address any recent employment or banking activity changes to improve your loan approval prospects.

What to Do If Your Application is Denied
If your mortgage application is denied, use our qualifier wizard on our website to schedule a consultation. Our experts can assist with credit improvement, debt reduction, property selection, and financial stability to enhance your eligibility for a mortgage.

Navigating the mortgage approval process requires diligence and strategic planning. You can overcome obstacles and secure your dream home with the right guidance and proactive measures.

Navigating the real estate market requires grasping all the associated costs, including real estate transfer taxes. In this comprehensive guide, we’ll delve into the intricacies of real estate transfer taxes, clarifying what they entail and how they impact buyers and sellers.

Real Estate Transfer Taxes Explained
A real estate transfer tax, also known as a deed transfer tax or documentary stamp tax, is a one-time fee levied during the transfer of property ownership. Unlike property taxes, estate taxes, or gift taxes, which are recurring or event-driven, real estate transfer taxes are incurred solely at the time of property sale.

Understanding Cost Variations
The rate of real estate transfer tax varies significantly by state, with some imposing nominal fees while others levy substantial charges. For instance, a $500,000 property sale might incur a mere $50 in transfer taxes in Colorado but as high as $3,500 in Florida. It’s crucial to recognize these variations and factor them into your budgeting process.

Responsibility for Payment
Determining who bears the responsibility for paying transfer taxes can vary depending on the state and the terms outlined in the real estate contract. While sellers commonly cover these taxes, buyers may assume the burden in certain jurisdictions, or the costs may be split between both parties. Understanding this aspect is essential for effective negotiation during the sale process.

Allocation of Funds
Proceeds from real estate transfer taxes serve as vital revenue sources for local governments, supporting initiatives such as infrastructure maintenance and public employee salaries. Additionally, in some states, these taxes contribute to state budget allocations, highlighting their significance in funding essential services and projects.

States Without Real Estate Transfer Taxes
It’s noteworthy that several states do not impose real estate transfer taxes, offering buyers and sellers in these regions a unique advantage. States such as Alaska, Idaho, Indiana, and Texas, among others, waive these taxes, providing a favorable environment for real estate transactions.

By comprehending the nuances of real estate transfer taxes, buyers and sellers can navigate the property sale process more effectively, ensuring transparency and clarity regarding associated costs. Whether you’re embarking on a real estate transaction or seeking to enhance your market knowledge, understanding transfer taxes is essential for informed decision-making.

Our latest market watch report delves into the recent trends shaping the real estate landscape. Despite the traditionally quieter month of January, home prices continue to climb, accompanied by a notable uptick in existing home sales. This offers both challenges and opportunities for buyers and sellers alike.

A Glimpse of Hope in Existing Home Sales

Recent data from the National Association of Realtors (NAR) reveals a slight resurgence in the sales of existing homes, attributed to an increase in listings becoming available. Lawrence Yun, NAR’s chief economist, notes a balance forming between supply and demand, driven by modest increases in listings and homebuyers capitalizing on lower mortgage rates.

Trends in Existing-Home Sales

In January 2024, existing home sales saw a 3.1% month-over-month increase nationally, reaching an annual pace of 4.0 million homes. While this marks a 1.7% decrease year-over-year, regional variations were observed. The West and South experienced monthly increases of 4.3% and 4.0%, respectively, while the Northeast and Midwest saw more modest changes.

Home Prices: Continuing to Climb

The median sale price for existing homes reached $379,100 nationally in January, reflecting a 5.1% increase from the previous year and setting a record for January. All four major U.S. regions saw annual price increases, with the West leading at $572,100, up 6.3% from a year ago.

The Challenge of Low Housing Inventory

Despite a slight increase from December, the housing inventory remains low at 1.01 million units, underscoring a market short of the ideal supply needed for balance. Homeowners’ reluctance to sell, particularly those with low-rate mortgages, contributes to this challenge.

Key Takeaways for Homebuyers and Sellers

Prospective homebuyers face high prices and mortgage rates but benefit from a growing inventory of existing homes. Sellers enjoy high demand and limited supply but must navigate the implications of current mortgage rates. Schedule a free consultation on our website for personalized advice and options.

Stay informed and empowered as you navigate the dynamic real estate landscape.

Buying a home is a significant milestone, and securing the right homeowners insurance safeguards your investment. This guide for new homebuyers will help you navigate the complexities of homeowners insurance and ensure adequate protection for your property.

The Importance of Comprehensive Coverage:
While standard policies cover many risks, they may not include specific perils like flooding or earthquakes. With an average annual cost of $1,687 for a $250,000 property, exploring policy endorsements or add-ons becomes essential. New homebuyers seeking additional endorsements or facing renewal rate hikes should proactively shop for comprehensive coverage.

Shopping for Home Insurance:
The process involves determining coverage needs, researching insurance companies, exploring add-ons, comparing quotes, and making a purchase. Consider not only the structure of your home but also personal property and detached structures. Research should focus on finding a company aligned with your needs, whether through digital tools, customer service, or specific coverage offerings.

Evaluating Coverage Needs:
Taking stock of belongings and home features helps assess personal property coverage. High-value items and structures like pools or sheds may require additional coverage. Understanding the replacement cost for these elements ensures comprehensive coverage.

Comparing and Choosing Policies:
After narrowing down choices, compare quotes for similar coverage, considering discounts and personal rating factors. Review key coverage details to ensure they meet your needs, including dwelling, other structures, personal property, loss of use, liability, and medical payments.

Timing Your Insurance Shopping:
While you can shop for home insurance anytime, situations like moving to a new state, facing rate increases, or needing specific endorsements create opportune moments. New homebuyers should start early to secure the best policy and price, ensuring a seamless transition if switching insurers.

Navigating homeowners insurance as a new homebuyer may seem daunting, but it’s a vital step in protecting your investment. By understanding coverage needs, comparing options, and selecting the right policy, you can ensure your new home and belongings are adequately protected. For a comprehensive discussion tailored to your situation, schedule a consultation on our website.

When historically low-interest rates led to fewer questions about Adjustable-Rate Mortgages (ARMs), the resurgence of interest prompts a refresher. Here, we’ll unravel the complexities of the popular 5/1 ARM, offering insights into its mechanics, benefits, drawbacks, and comparisons with other mortgage options.

What is a 5/1 ARM?
A 5/1 ARM, a specific type of adjustable-rate mortgage, consists of a 5-year fixed-rate period followed by annual rate adjustments. This post delves into the critical components, including the initial fixed-rate duration and the frequency of subsequent rate adjustments.

Example Scenario:
Consider a $300,000 5/1 ARM loan at a 6.5% starting interest rate. For the initial five years, monthly payments would be approximately $2,045, with a potential 5% lifetime cap, capping the maximum payment at around $3,140.

Key Components:

Introductory Rate: Lower than fixed-rate mortgages for the initial five years.
Adjustment Intervals: Annual adjustments post the fixed-rate term.
Rate Caps: Initial, periodic, and lifetime caps limiting rate increases.
Pros and Cons of a 5/1 ARM
Pros:

Lower Initial Payments: Affordability in the initial years compared to a 30-year fixed mortgage.
Potential for Rate Decrease: Payments may decrease if market rates fall.
Cons:

Risk of Higher Rates: Payments can rise post the fixed period if market rates increase.
Complexity: Understanding rate caps, indexes, and resets can be challenging.
Interest-Only Payments: Some ARMs allow interest-only payments initially, leading to potential future payment challenges.
Comparing 5/1 ARM to Other Loans
5/1 ARM vs. Other ARMs:

Longer-term ARMs (e.g., 7/1 or 10/1) offer stability but with higher initial fixed rates.
5/1 ARM vs. Fixed-Rate Mortgage:

Fixed-rate mortgages offer payment certainty, unlike potential fluctuations with a 5/1 ARM.
When to Consider a 5/1 ARM
Short-Term Ownership: Ideal for selling or refinancing before rate adjustments.
Income Growth Expectations: Suitable if anticipating higher future income.
Financial Flexibility: Viable if the budget accommodates potential rate increases.
The 5/1 ARM presents a potentially cost-effective route to homeownership, balancing initial affordability with future rate uncertainties. Prospective borrowers should carefully evaluate their financial situations, plans, and ARM intricacies to make informed decisions. Schedule a call or meeting on our website for personalized guidance tailored to your unique situation!

When you’re stepping into the world of homebuying, especially with a mortgage, a critical piece of paperwork you’ll encounter is the Proof of Funds (POF) letter. More than just a formality, this document plays a pivotal role in the buying process, providing lenders and sellers with confidence in your financial preparedness. Let’s delve into the nuances of a POF letter, its significance, and the steps to obtain one.

Understanding the Proof of Funds Letter

A Proof of Funds letter serves as your financial gateway for home purchases. It serves as evidence that you possess the necessary liquid assets, such as cash, checks, or money in accounts, to cover the associated costs, including the down payment and closing fees. For cash buyers, this letter signifies the ability to cover the entire home cost. Without this assurance, sellers may be reluctant to take your offers seriously.

Why is it Crucial for Homebuyers?

The primary purpose of a POF letter is to authenticate your home purchase offer. In competitive housing markets, possessing this letter can be a game-changer, setting you apart from buyers who lack immediate access to funds. While it may not be as critical in certain scenarios, such as a sale by the owner without an agent, its significance cannot be understated.

Acceptable Funds for Mortgage Proof

Your POF can consist of various funds, including:

– Money in checking and savings accounts
– Liquidated investments or retirement accounts
– Gift funds or grants
– Bridge loans
– Proceeds from pending sales

Liquidity is key, and assets like mutual funds or life insurance may not be considered if they cannot be readily liquidated.

Distinguishing Between Preapproval and Proof of Funds Letters

It’s essential to distinguish between a mortgage preapproval letter and a POF letter. The former is a preliminary confirmation from a lender regarding your loan eligibility, while the latter serves as tangible evidence of your financial capability to complete the purchase.

Securing Your Proof of Funds Letter

How can you obtain this crucial letter? Here’s a simple guide:

1. Consolidate Your Funds: Merge your funds into one account well before seeking mortgage preapproval, facilitating a smoother process.

2. Request from Your Bank: Fill out a request form or visit your bank in person, as most banks provide the letter within a few days.

3. Share with Relevant Parties: Once obtained, promptly share the letter with the lender and seller, keeping a copy for your records.

Example of a Proof of Funds Letter

[DATE]

[NAME OF BANK]

[ADDRESS OF BANK]

[CONTACT INFORMATION]

Dear [RECIPIENT’S NAME],

This letter certifies that [NAME OF INDIVIDUAL/COMPANY], a client since [YEAR], is in good standing with our bank. They hold a total USD $[AMOUNT] balance in cash deposits.

Attached are the account statements for verification.

For further inquiries, contact us at [CONTACT INFORMATION].

Sincerely,

[SIGNATURE]

[BANK REPRESENTATIVE’S NAME]

[TITLE]

Navigating the intricacies of the home-buying process involves understanding various documents and procedures. The Proof of Funds letter emerges as a significant player, influencing your journey to homeownership by showcasing your financial readiness and commitment as a buyer. Possessing this letter can potentially pave the way for a smoother and more assured path to owning your dream home.

For many homeowners navigating a conventional mortgage with less than a 20 percent down payment, Private Mortgage Insurance (PMI) becomes an unavoidable monthly expense. Designed to protect lenders in case of default, PMI adds an extra cost to your mortgage payment. However, there are several proactive ways to eliminate this expense, potentially saving you a substantial amount over the life of your mortgage.

When Does PMI Go Away?
Guided by the Homeowners Protection Act of 1998, PMI removal is subject to specific guidelines. As per the Act, lenders are mandated to automatically terminate PMI once the borrower reaches a 78 percent loan-to-value (LTV) ratio. This means PMI should be lifted automatically when your mortgage principal is reduced to 78 percent of the original purchase price of your home. For example, if you bought a home for $300,000, PMI removal triggers when your mortgage principal falls to $234,000. Importantly, PMI costs decrease as you pay down your loan and are entirely removed upon reaching the required LTV ratio.

How to Get Rid of PMI
While PMI can inflate your monthly mortgage payment, consider these strategies to eliminate it:

Wait for Automatic or Final Termination

Under the Homeowners Protection Act, PMI is automatically terminated at a 78 percent LTV ratio or must be canceled at the midpoint of your loan’s amortization schedule, regardless of LTV ratio.
Request PMI Cancellation at 80 Percent Mortgage Balance

Proactively request PMI cancellation when your mortgage balance hits 80 percent of your home’s original value. Submit a written request to your lender, meeting specific requirements.
Pay Down Your Mortgage Early

Accelerate reaching 20 percent equity by making larger or additional mortgage payments, allowing you to request PMI cancellation sooner.
Refinance Your Mortgage

Consider refinancing if you’re close to the 20 percent equity mark, seeking a loan without PMI requirements.
Reappraise Your Home

In a thriving real estate market, a home’s value may increase, pushing your equity over 20 percent and qualifying you for PMI cancellation.
Home Improvements

Significant home improvements can boost its value, potentially reaching the required equity level for PMI cancellation.
Caution: Don’t Drain Your Assets
While eliminating PMI is financially beneficial, it’s crucial not to deplete savings or investment accounts. Maintaining a balance of liquid assets for emergencies is a wise financial strategy.

Know Your Rights Under Federal Law
Familiarize yourself with the Homeowners Protection Act, ensuring your right to eliminate PMI under specific conditions. Keep track of payments and home value. If you suspect non-compliance, file a complaint with the Consumer Financial Protection Bureau.

Conclusion
Paying off PMI is a savvy financial move, potentially saving thousands. Understand the rules, keep a vigilant eye on your mortgage balance and home value, and take proactive steps to remove this expense as soon as you’re eligible. The responsibility often lies with you, the homeowner, so stay informed and proactive in managing your mortgage costs. Explore more insights on our website.