Mortgage Rates At 18-Month High
Home buyers have been enjoying the fruits of low mortgage rates for quite some time. The pandemic marked a time when housing was a bit unstable, but now times are changing. For the past year, homeowners and buyers saw mortgage rates tumble to historic lows. Unfortunately, it looks like this incredible real estate trend is coming to an end. All indications are that mortgage rates are going to start rising and will continue to rise through the end of this year. The team at People's Choice Mortgage is here to give you the data regarding mortgage rates and what it means for homeowners and home buyers.
Mortgage Rates Are on the Rise
Mortgage rates are expected to rise as we head into the middle of this year. This is mostly thanks to the economy recovering from the novel Coronavirus. The rising has already happened as we are currently in an 18 month high of mortgage rate increases. Mortgage rates have been continuously increasing. These increases are expected to happen. Alongside inflation, experts have predicted that inflation would be one of the biggest factors influencing rising mortgage rates. Fears of inflation mean interest rates will increase several more times.
2021 was a time when mortgage rates were slowly increasing, but still hovering at historic lows. Mortgage rates were also lower because investors were worried about the pandemic and its effect on the housing market. These worries made sense because the future of living was uncdertain. However, the world is starting to return to normalcy. Jobs are now switching back to in-person and people have to commute to more places. This has caused confidence in the market which has led investors to invest more. THe end result is higher mortgage rates that do not seem to be going down any time soon.
Now, we are living in the reality of rising mortgage rates. The latest data by Freddie Mac tells us that the 30-year fixed-rate average crept higher. While rates are on the rise, there is nothing to worry about. Mortgage rates fluctuate, but if we look at larger historical trends we see that mortgage rates have been exponentially worse.
Why Low Mortgage Rates are Fantastic for Home Buyers and Homeowners
Low mortgage rates are great for homeowners and home buyers, alike. Lower mortgage rates can save you money on monthly payments. They can also save you tens of thousands of dollars over the life of your mortgage. For this reason, when rates are low, people want to buy homes. At the same time, when rates are low, homeowners want to refinance their existing mortgage at lower rates. You should absolutely take advantage of this market if you can. Changes in the future rate will require you to reassess how you budget which can result in not getting your dream home.
How Will Future Mortgage Rates Stack Up Historically?
The question of rising mortgage rates may be scary for some homebuyers. Some of you may feel regret about not refinancing your mortgage or capitalizing on that new dream home. However, there is no need to fear. The future is uncertain. We can’t tell if mortgage rates will ever go back down to what they are now, but they are still great rates.
Taking a look at the average historical mortgage rates offered by Freddie Mac, we can see why the marketplace is still great for homeowners. Mortgages were also hovering at historic lows in 2020, but they were not less than 3% for most of that year. Taking a look at the data, we see that the average rate was 3.11% for 2020. Even if we look at 2010, the average mortgage rate was a whole percentage up at 4.09%. When comparing the two, we can see that mortgage rates have historically been higher compared to the rates we have today.
Looking back even further reveals even higher rates. In the decade of the 2000s, the mortgage rate was sitting at an average of 6.29%. Going to the 1990s, the rate was averaging at 8.12%. In the 1980s the rate was even more. A percentage of 12.7% was the average. Mortgage rates are still historically low, and the rise of rates in 2021 and 2022 is nothing to worry about.
Final Thoughts
Even small increases in mortgage rates can add up to thousands of dollars. That’s why if you are thinking of buying a home or refinancing your current mortgage, it is best to act now. Delaying your decision can cost you the opportunity to get lower monthly payments and big savings over the life of your home loan. If you want to buy a house, do it as soon as possible to lock in the best possible mortgage rates.
The best thing you can do is contact us and try one of our complimentary mortgage qualifiers. This will tell you exactly how close you are to buying a home of your own. However, if you do not qualify for a mortgage today, there is no need to fret. At Peoples Choice Mortgage we believe that everyone deserves the right to own a home. Just because you do not qualify today, it does not mean that you cannot qualify in the future. Based on what we learn about your financial situation from our complimentary mortgage qualifier, we can help you. We will craft a plan that will put you on a path to homeownership.
While it is likely that today’s mortgage rates will be gone, tomorrow’s mortgage rates will be higher. Contact us today so that we can help make your dream of owning a home a reality.
