Are mortgage rates on the rise? Understanding market trends can help you decide the right time to buy a new home.
If you’ve been following the financial news lately you have probably heard about mortgage rates recently rising to over four percent for the first time this year. I often get asked about where rates are headed and if it’s the right time to purchase or refinance. That’s a tricky question.
While I am not one to predict where the market is going to be in the future, Fannie Mae, Freddie Mac, the Mortgage Bankers Association and the National Association of Realtors are each calling for rates to continue their upswing over the next six quarters. So now may be a good time to talk to your local mortgage banker to see what you qualify for before rates go up.
Forecasting the future
If you’re still on the fence, let’s take a look at some recently published information about current rates vs. the last four decades.
Recently, Freddie Mac published a blog post titled “Mortgage Rates: Still the Deal of the Century”. They explained that if you are planning to purchase a home, now may be the time:
“If you are in the market to buy a home, today's average mortgage rates are something to celebrate compared to almost any year since 1971.”
And they let their readers know that there is no guarantee that rates will remain this low:
“Over the past few years, we've enjoyed a long run of historically low mortgage rates. While no one expects them to change dramatically overnight, they are expected to head up. Most experts agree that mortgage rates will drift up in the coming months to end the year approaching 4.50%.”
The article went on to calculate what the principal and interest payment would be based on a $200,000 fully amortizing mortgage at different times in history:
Here is a look at rates over the decades:
Here is a look at rates over the last four years and what Freddie Mac projects for next year:
The bottom line
If you are thinking of buying your first home, refinancing or looking to move up to your dream home, now may be the time to search Angi for a reputable mortgage banker to see what you qualify for.
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