Two Graphs That Show Why You Shouldn’t Be Upset About 3% Mortgage Rates

 

With the average 30-year fixed mortgage rate from Freddie Mac climbing above 3%, rising rates are one of the topics dominating the discussion in the housing market today. And since experts project rates will rise further in the coming months, that conversation isn’t going away any time soon.

But as a homebuyer, what do rates above 3% really mean?

Today’s Average Mortgage Rate Still Presents Buyers with a Great Opportunity

Buyers don’t want mortgage rates to rise, as any upward movement increases your monthly mortgage payment. But it’s important to put today’s average mortgage rate into perspective. The graph below shows today’s rate in comparison to average rates over the last five years:Two Graphs That Show Why You Shouldn’t Be Upset About 3% Mortgage Rates | Keeping Current MattersAs the graph shows, even though today’s rate is above 3%, it’s still incredibly competitive.

But today’s rate isn’t just low when compared to the most recent years. To truly put today into perspective, let’s look at the last 50 years (see graph below):Two Graphs That Show Why You Shouldn’t Be Upset About 3% Mortgage Rates | Keeping Current MattersWhen we look back even further, we can see that today’s rate is truly outstanding by comparison.

What Does That Mean for You?

Being upset that you missed out on sub-3% mortgage rates is understandable. But it’s important to realize, buying now still makes sense as experts project rates will continue to rise. And as rates rise, it will cost more to purchase a home.

As Mark Fleming, Chief Economist at First American, explains:

“Rising mortgage rates, all else equal, will diminish house-buying power, meaning it will cost more per month for a borrower to buy ‘their same home.’”

In other words, the longer you wait, the more it will cost you.

Bottom Line

While it’s true today’s average mortgage rate is higher than just a few months ago, 3% mortgage rates shouldn’t deter you from your homebuying goals. Historically, today’s rate is still low. And since rates are expected to continue rising, buying now could save you money in the long run. Contact a local real estate professional so you can lock in a great rate now.

Comments

Post a Comment

Popular posts from this blog

Get Ready for Smaller, More Affordable Homes Have you been trying to buy a home, but higher mortgage rates and home prices are limiting your options? If so, here’s some good news, smaller, more affordable homes are on the way. In some ways, smaller homes are already here. When the pandemic hit, the meaning of home changed. People needed the space their home provided not only as a place to live, but as a place to work, go to school, exercise, and more. Those who had that space were more likely to keep it. And those that didn’t were in a position where they were trying to sell their smaller house to move up to a larger one. That meant the homes coming to the market during the pandemic were smaller than those on the market before the pandemic – and that trend continues today. Larger homes tend to come on the market during the summer months when households with children who are out of school are looking to move. That seasonality means, based on historical trends and the fact that fall is now approaching, we can expect smaller, more affordable homes to come to the market throughout the rest of the year. What Does This Mean for You? The seasonal trend of smaller homes coming to the market in the later months of the year, coupled with builders bringing smaller, more affordable newly built homes to the market right now, is good news – especially if you’re finding it difficult to afford a home. If a smaller, more affordable home sounds appealing to you, good news – they’re coming. To keep up with what’s available in our area, DM me. #realestate #homeownership #homebuying www.DanFreshley.com

Image
Get Ready for Smaller, More Affordable Homes Have you been trying to buy a home, but higher mortgage rates and home prices are limiting your options? If so, here’s some good news, smaller, more affordable homes are on the way. In some ways, smaller homes are already here. When the pandemic hit, the meaning of home changed. People needed the space their home provided not only as a place to live, but as a place to work, go to school, exercise, and more. Those who had that space were more likely to keep it. And those that didn’t were in a position where they were trying to sell their smaller house to move up to a larger one. That meant the homes coming to the market during the pandemic were smaller than those on the market before the pandemic – and that trend continues today. Larger homes tend to come on the market during the summer months when households with children who are out of school are looking to move. That seasonality means, based on historical trends and the fact that fall ...
Read more

Accounting, Digital, Broker Comp Tools; FHA, VA, USDA Developments; Why Rates are Stubborn

Image
Imagine my surprise at finding tag (like on the playground) is an organized sport. Imagine my surprise at finding two gas stations at the same intersection yesterday in Truckee, California with two different prices for unleaded! Rather than wait for the CFPB to tell me that I could save money by going to the cheapest station, as it did by paying for a study on how different lenders have different mortgage prices, I actually reasoned, all by myself, that I could, and did, buy the least expensive gasoline. Switching gears, but continuing on with the thinking vein, a lot of reasoning went into determining that a) the earth is round, and b) globes are not some newly invented conspiracy theory. Someone needs to let Georgia’s current GOP district chair Kandiss Taylor know globes are globes. What the heck am I missing by subscribing to the round earth concept? And how about this for sensationalist headlines from Auction.com: One-Third of Buyers Expect Home Prices to Decline. Really? “Despite ...
Read more