Mortgage Rates are Climbing, Now is the Time to Act!
We’ve been writing about it for a while now, and last week the average 30-year fixed mortgage rate from Freddie Mac jumped from 3.22% to 3.45%. That’s the highest point it’s been in almost two years. If you haven’t been reading our blog or watching our videos and you’re thinking about buying a home, this news may have come as a bit of a shock. For the last couple of months we’ve been reporting on the experts who have been calling for rates to rise in their 2022 projections, and the forecast is now becoming a reality. Take a look at these projections from Freddie Mac for this year:
- Q1 2022: 3.4%
- Q2 2022: 3.5%
- Q3 2022: 3.6%
- Q4 2022: 3.7%
As the numbers show, this jump in rates is in line with the expectations from Freddie Mac. And what they also indicate is that mortgage rates are projected to continue climbing throughout the year. But should you be worried about rising mortgage rates? What does that really mean for you?
As rates increase even modestly, they impact your monthly mortgage payment and overall affordability. If you’re looking to buy a home, rising mortgage rates should be an incentive to act sooner rather than later. And If you’re looking to sell your home and want access to the largest pool of buyers, listing now is the best way to insure you’ll get top dollar for your property.
The good news is, even though rates are climbing, they’re still worth taking advantage of. Historical data shows that today’s rate, even at 3.45%, is still well below the average for each of the last five decades (see chart below):
That means you still have a great opportunity to buy now with a rate that’s better than what your loved ones may have paid in decades past. If you buy a home while rates are in the mid-3s, your monthly mortgage payment will be locked in at that rate for the life of your loan. As you can see from the chart above, a lot can change in that time frame. Buying now is a great way to protect yourself from rising costs and future rate increases while also securing your payment amount for the long term.
Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says:
“Mortgage rates surged in the second week of the new year. The 30-year fixed mortgage rate rose to 3.45% from 3.22% the previous week. If inflation continues to grow at the current pace, rates will move up even faster in the following months.”
Mortgage rates are increasing, and they’re forecast to be even higher by the end of 2022. If you’re planning to buy this year, acting soon may be your most affordable option. Contact one of our agents today for personal, expert assistance in buying your next home!