The housing market is always evolving, and it can sometimes feel like you never quite know when it’s the right time to buy. But your friendly experts at Wintrust Mortgage are always here to 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. We’ve seen both record low interest rates (2.65% for a 30-year fixed-rate mortgage in January 2021), as well as the highest rates in more than two decades (7.79% for the same 30-year fixed-rate mortgage in October 2023)—all within less than three years.¹

The possible good news is that many experts believe mortgage rates will decrease in 2024, suggested by both improving inflation and the Federal Reserve’s third consecutive decision not to increase interest rates in its December 2023 meeting.² Encouraging signs are already evident in the market, as mortgage rates have fallen from that 7.79% high in October to 6.67% in December—a 1.12% decrease in less than two months.³ Unfortunately, there remain buyer frustrations in the market today. Housing inventory is holding low; one June 2023 report estimated a total inventory decrease of 4.6% over the course of 2023.⁴

Rather than house hunting in a market characterized by low inventory, many buyers are choosing new construction to build their dream homes with construction-to-permanent home loans. This offers buyers a way to secure financing for a new build, which then converts into a permanent mortgage upon completion. These loans have many benefits for buyers who want to go in this direction:

• One set of closing costs. Most mortgages don’t cover the cost of construction, meaning a buyer must go through the borrowing process twice. One loan saves buyers both time and money, with one set of closing costs.
• Protect against potential changes in the market. Buyers who take on new-construction projects run the risk of a fluctuating market during the build. With a construction-to-permanent loan, the interest rate for the long-term mortgage is locked in before a buyer begins work. 
• Give buyers the homes they truly want. The ability to customize every square foot of a house gives buyers the freedom to craft their home to their liking. It also presents buyers with an opportunity to build a house based on market trends for a higher potential return on investment (ROI).

Regardless of how each individual consumer approaches homeownership, there are significant reasons to consider it as a cornerstone of both your personal and financial future. One report from the Federal Reserve in October 2023 showed that median home equity for U.S. homeowners rose from $139,100 in 2019 to $201,000 in 2022—a more than 44% increase.⁵ This suggests homeownership shows strong long-term financial potential when you look beyond current conditions and short-term trends in the market.

This is especially important to think about for first-time buyers, considering rental rates in the U.S. continue to climb, with Zillow reporting a 3.3% increase year-over-year in November 2023, and an astounding 29.4% since the beginning of the COVID-19 pandemic. The same report shows that average asking rent is now $1,982 per month,⁶ 100% of which is paid to a landlord and never seen again. This is in contrast to monthly mortgage payments, some value of which homeowners can hold onto in the form of increasing home equity over time.

With signs of possible interest rate improvement, some consumers may be waiting for rates to further decrease—but it’s important to look at the bigger picture. While there are indications that interest rates could continue to decrease, many experts aren’t forecasting significant declines in the near future.⁷ When you consider the continued rise of rental rates as well as losing additional time that could be spent building home equity, waiting for a particular interest rate might not be in an individual’s best long-term interest.

We may have the perfect loan for you. No matter how the market looks, Wintrust Mortgage offers lending in all 50 states with a wide selection of mortgage products—some of which are exclusive or hard to find elsewhere—to help you find a solution based on your individual needs. Many products also include down payment assistance and other incentives for qualifying homebuyers, including grants and tax credits^8,9, so you may be able to widen your search to cover as much of the available inventory as possible.

The best way to get started is by becoming a PremierBuyer™.¹⁰ This gives you a better idea of what you can afford, and saves you time when you start house hunting. Plus, a PremierBuyer™ are more attractive to sellers by proving one is both serious about a prospective purchase and more likely to be able to financially follow through. Wintrust Mortgage offers an online application to become a PremierBuyer™ that’s fast, easy, and secure.