April 18, 2025: "Amid Soaring Interest Rates, These Mortgages Don't Look Scary Anymore", a CNET Money look at mortgage choices amid high interest rates by Laura Michelle Davis featured HSH content and commentary provided by HSH.com VP Keith Gumbinger:
Adjustable-rate loans have a more complex structure than traditional fixed-rate mortgages, but their fraught history gives them an unjustifiable bad rap.
"Many of the risks that existed in the market back before the housing crash are long gone, and most had to do with loose underwriting standards," Keith Gumbinger, vice president of HSH.com, said via email.
According to Gumbinger, these mortgages aren't evil or toxic but simply another type of mortgage product that could provide a more affordable gateway into homeownership. Like any other loan, the risk level depends on the lender's disclosures and the borrower's financial readiness.
The longer-term outlook for mortgage rates also plays a role. Given expectations of Federal Reserve interest rate cuts, a potential economic downturn and lower inflation, mortgage rates could move lower over the next three to five years.
In that context, Gumbinger said choosing an ARM provides some immediate financial relief, especially with the possibility of getting a cheaper adjustable rate or refinancing to a lower long-term fixed rate once the introductory period is up.
Today, lenders must adhere to the ability-to-repay rule, which ensures borrowers are fully vetted with a low likelihood of defaulting on their home loans once the rate resets. In fact, Cohn said banks now ensure that ARM borrowers qualify for a higher adjusted rate, either the fully indexed rate or 2% higher than the cheaper introductory rate.
Though the most considerable risk with ARMs is higher monthly payments after the five-, seven- or 10-year period is over, Gumbinger said today's ARMs have mechanisms, including cap structures, to limit the negative consequences of interest rate increases.
April 14, 2025: "Mortgage Rate Forecast: Will Bond Market Panic and Tariff Uncertainty Keep Rates High?", a CNET Money review of unsettled economic conditions by Katherine Watt featured several observations by Keith Gumbinger, HSH.com's VP:
While experts predict rates will move lower throughout 2025, it won't be a dramatic decline: Fannie Mae expects average 30-year fixed mortgage rates to remain around 6.5%. And with investors and lenders bracing for more news on Trump's trade agenda, more panic-based turbulence is likely in the coming months.
"So much of the present volatility seems based on emotion rather than logic or reason, making it hard to know what to expect," said Keith Gumbinger, vice president of HSH.com. Given that tariffs are still in negotiations, there's no way to know the exact outcome in the financial markets, he said.
Bond yields had already been on the rise even before last week, fueled by a combination of risk factors, including the inflationary impact of tariffs. Concerns about escalating US debt and deficits could also make Treasury bonds appear less secure, particularly if the economy were to tip into a recession.
For bond yields (and mortgage rates) to fall meaningfully, there needs to be greater clarity on the changes to trade policy. Knowing the new baselines would at least help investors manage their expectations regarding inflation, growth and Federal Reserve policy, said Gumbinger.
April 1, 2025: "How Will Tariffs Affect Spring Homebuying", a CNET Money article by Katherine Watt looking at how and whether the changing picture on trade policy affects home buying and selling this spring featured an observation from HSH.com vice president Keith Gumbinger:
After years of buyers sitting on the sidelines, the pent-up demand for houses is likely to explode at some point. "At least some potential homebuyers have become accustomed (or resigned) to mortgage rates at current levels," said Keith Gumbinger, vice president at HSH.com."
March 28, 2025: "Investing in the Spring 2025 Real Estate Market", a National Association of Realtors radio program and podcast hosted by Stephen Gasque featured HSH.com vice president Keith Gumbinger discussing the financing outlook for investment properties as 2025's spring homebuying season gets underway.
March 10, 2025: "How Does Refinancing a Mortgage Work?" a BottomLineInc discussion of the refinancing process, who refinances and why they do featured advice, strategies and tools from Keith Gumbinger, HSH.com's Vice President.
March 3, 2025: "Weekly Mortgage Rate Predictions", a CNET Moneyoutlook for mortgage rates by Katherine Watt featured soem observations from HSH.com VP Keith Gumbinger:
Mortgage rates have fallen more than a quarter of a percentage point (0.25%) since mid-January.
While that's a welcome change that makes mortgage rates a little better, "it doesn't make them especially low or attractive," said Keith Gumbinger, vice president at HSH.com.
Plus, even if lower rates are good for housing affordability, the reasons behind the recent dip - namely, a weaker job market and higher inflation - aren't beneficial for most US households.
Housing giant Fannie Mae expects average mortgage rates to remain above 6.5% for most of the year. But if new data points to long-term economic distress, mortgage rates could hit that target earlier than expected, according to Gumbinger. "There's a great bit of uncertainty in the outlook at the moment," he said.
January 28, 2025: "What This Week's Fed Decision Means for Mortgage Rates", a CNET Money discussion of Fed policy moves and effects on home financing costs by Katherine Watt included an observation from Keith Gumbinger, HSH.com's vice president:
Economists say it's too early to say how Trump's economic agenda and a Republican-led Congress might alter the central bank's approach to interest rate adjustments, noting only that the Fed plans to move cautiously.
"It's a bit of a 'wait-and-see' period with regard to the new administration, and a lot may happen over the first 100 days of it, given the flurry of executive orders," said Keith Gumbinger, vice president of HSH.com.
January 10, 2025: "The 2025 Homebuying Guide", a National Association of Realtors radio program and podcast hosted by Stephen Gasque featured HSH.com vice president Keith Gumbinger discussing what to do -- and what not to do -- when looking to secure home financing in 2025.
January 6, 2025: "Mortgage Rate News and Outlook", a CNET Money update of home financing conditions by Katherine Watt featured some comments from HSH.com VP Keith Gumbinger:
Only a sudden economic shock, such as the onset of a recession or spike in oil prices, could cause mortgage rates to plunge, said Keith Gumbinger, vice president of mortgage site HSH.com. "Drastic changes in direction are usually the result of some emerging significant event somewhere that upends financial markets."
Mortgage rates are also impacted by geopolitical events, including military conflicts and elections. Political instability can lead to economic uncertainty, which can result in more volatility with bond yields and mortgage rates.
Bond market investors would have to be convinced that the economy is cooling for mortgage rates to reverse course. That's why, absent a fresh downshift in the inflation trend or a sudden weakening of labor conditions, mortgage rates will remain close to 7% for a while, said Gumbinger.
January 2025: "Best Money Moves for 2025", a Bottom Line look ahead to the new year included a forecast for real estate conditions from HSH.com vice president Keith Gumbinger.
"If you are a seller: You still are in the driver’s seat due to limited inventory and strong demand, especially in desirable locations. I expect the median US sales home price to rise 2% to 3% this year, after going up 3% to 4% in 2024. Sellers will need to factor in the current "lock-in" effect - does it make financial sense to sell your home, even with prices near record highs, if you have to exchange your sub-3% mortgage for a much higher one to purchase your next house?"
"If you are a buyer: Optimize your chances in what continues to be a challenging and competitive environment. The average home remains on the market only about 25 days. If you find your dream house, be ready to move on it quickly. Make sure your credit and finances are in good shape. Know what your maximum price is and what factors are deal breakers. I expect rates on 30-year fixed mortgages to come down, but the decline is unlikely to be smooth. Plan and budget for the low-to-mid-6% range."
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