The housing market is always evolving. From fluctuating interest rates to shifting supply, it feels like you’re constantly hearing about buyers’ versus sellers’ markets. But your friendly experts at Wintrust Mortgage are always here to answer questions and guide you through the mortgage process, no matter how the market looks.

The last few years in the housing market have been a roller coaster for everyone. Record low rates—as low as 2.65% for a 30-year fixed-rate mortgage in January 2021¹—led to surging demand, bidding wars, and plummeting inventory. Then as predicted, a dramatic reversal began in early 2022; rates for the same 30-year fixed-rate mortgage broke 7% for the first time in more than two decades in October preceding a mild rebound as the calendar year came to a close.²

And with the relative stabilization of interest rates, it’s important to reiterate that recent rates have not been particularly high by historic standards, but rather followed a period of historically low rates within the past few years.

Consider what interest rates have looked like for a 30-year fixed-rate mortgage over the past several decades:

The above table† illustrates that interest rates as of April 2023 are not far from the average rate during the 2000s, and are also holding significantly lower than they were in the 1980s and 1990s.

One report released for Q3 of 2021 showed that homeowners gained an astounding $3.2 trillion of collective home equity—an average of $56,700 per borrower—from the same time one year prior.⁴ While this financial windfall couldn’t be expected to continue trending upward with such indefinite velocity, it nevertheless suggests homeownership is a valuable long-term asset for future financial success. 

This is especially important to think about for first-time buyers, considering the national rental average of a single-family home increased by 13.4% in the first half of 2022 compared to the same period in 2021.⁵ Despite these increases slowing down more recently, rental rates continue to trend upward; in March 2023, asking rents increased by an additional 0.5% from the month prior.⁶

One possible upside for prospective buyers is that home sale prices have seemed to cease their unprecedented rise. In February 2023, home sale prices fell year-over-year by 0.2%, breaking a nearly 11-year record streak.⁷ Plus, while housing inventory remains relatively low—especially during the typically busy spring market—the total listings in the United States were up 13% in February compared to the historic lows one year prior.

Nevertheless, as U.S. housing inventory remains down 30% from five years ago,⁸ another option for consumers is initiating a home renovation project. From remodels to home additions, many consumers are foregoing the housing market in favor of fixing up current homes or choosing a fixer-upper. Plus, many consumers don’t know that they can get prequalified for a renovation loan along with a new mortgage, so they can get started on construction sooner. A Purchase + Renovate home loan from Wintrust Mortgage allows borrowers to:

• Buy and update a home. Use your Wintrust Mortgage loan to buy a home, and also have the money to renovate it to fit your specific needs.
• Lock in at one fixed interest rate. Bundling a purchase and renovation loan allows you to lock in at a single interest rate, so you don’t have to monitor two separate loans.
• Pay one set of closing costs. Save money by only paying fees on a single loan, rather than taking out two and paying double.

We have the perfect loan for you. No matter how the market looks, Wintrust Mortgage offers a wide selection of mortgage products, including exclusive loans that aren’t available elsewhere, to help you find the perfect solution based on your individual needs. Many products also include down payment assistance and other incentives for qualifying homebuyers, including grants and tax credits, so you can widen your search to cover as much of the available inventory as possible.***

The best way to get started is with prequalification. This gives you a better idea of what you can afford, and saves you time when you start house hunting. Plus, prequalified buyers are more attractive to sellers, helping you to better sort through the market. Wintrust Mortgage offers a confidential and user-friendly online prequalification application that’s fast, easy, and secure.