I’m the chief economist of a mortgage firm that has funded more than $100 billion in loans. These are 3 things to know about the housing market now.

As home prices and mortgage rates march upwards, and housing inventory remains seriously constrained, many buyers are wondering: Should I buy? And if I want to buy, what do I need to know about the housing market now? That’s why MarketWatch Picks created a series where we ask prominent economists and real estate pros their take on the housing market now. For this one, we talk to Cameron Findlay, the chief economist and EVP of Capital Markets for AmeriSave Mortgage Corporation, which has funded more than $115 billion in loans since its start in 2000. Findlay has spent more than 20 years in the mortgage industry — previously as president and head of capital markets at mortgage lender LoanSnap, chief economist at LendingTree and chief economist and head of secondary marketing of capital markets at Discover Financial Services. We asked him what home buyers should know about the market right now. (See the lowest mortgage rates you can get here.)

Mortgage rates are on the rise — but put that in perspective 

Rates have risen this year and are unlikely to decrease materially anytime soon, Findlay says. Indeed, from early 2022 to now, rates have gone from a little over 3% to roughly 6%, Bankrate data shows. “If you want to buy a home, the longer you wait, you could be costing yourself money or purchasing power,” says Findlay. 

That said, it’s impossible to predict the future, but if you are worried about rate hikes, you might want to consider a rate lock. These typically “enable you to lock in today’s rate for a period of 90 days,” Findlay explains. Indeed, other experts have debated what will happen with mortgage rates in the coming months, with inflation playing a big role in the trajectory of rates.

Though rates are have risen significantly this year, Findlay points this out: Mortgage rates are still somewhat low by historical standards. “Rates were 18% the last time inflation was this high in the early 1980s, and they were as high as 8.5% as recently as 2000,” says Findlay. (See the lowest mortgage rates you can get here.)

Don’t expect home prices to dip significantly any time soon

With data from Freddie Mac indicating that the United States is short more than 3 million homes, there’s still an inventory crunch and new home building is slowing significantly. That means that prices are unlikely to decrease significantly anytime soon even with buyer demand beginning to wane. “In some markets, prices may plateau if rates continue to rise, but if you’re thinking about staying on the sidelines until prices start falling, you may end up waiting for some time,” says Findlay.  Other economists agree that even if the housing market cools a bit, home prices won’t fall significantly. 

Rates ‘vary widely’ by lender, and by type of loan, so shop smartly

Market volatility has created a wider-than-normal range of mortgage rates between lenders, says Findlay. “Rates now vary widely from provider to provider, which can create thousands of dollars difference in your borrowing costs,” he says. “For every percentage point increase in a mortgage rate, the borrower on a $300,000 loan will pay an extra $190 per month. Over the full life of a 30-year mortgage, that’s a substantial difference — more than $67,000,” says Findlay. (See the lowest mortgage rates you can get here.)

Findlay says shoppers may want to look at different loan types. “A good rule of thumb is if you’re planning on staying less than 7 years, you may want to consider a higher loan rate with a larger rebate to cover closing costs and moving expenses and if you’re planning on keeping the home more than 7 years, you should opt for a lower rate,” says Findlay. Rebate funds can be used to offset fees and not only cover non-lender-related closing costs, but on prepaid expenditures like property taxes and insurance premiums. Indeed, if you’re only planning to be in the home for a few years, you may also want to consider an adjustable rate mortgage (ARM), which can save you money as long as you plan to sell within 5 to 7 years.