With Mortgage Rates Climbing, Now’s the Time To Act
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’re thinking about buying a home, this news may have come as a bit of a shock. But the truth is, it wasn’t entirely unexpected. Experts have been calling for rates to rise in their 2022 projections, and the forecast is now becoming a reality. Here’s a look at the 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.
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.”
Bottom Line
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. Let’s connect to start the homebuying process today.
Contact one of Our Agents today!
See out Complete Inventory of Available Properties!
Maybe with the leverage you currently have, you can negotiate a deal that will allow you to make the move of your dreams.
What’s your home’s value?
Put an experts eye on your home search! You’ll receive personalized matches of results delivered directly to you. We’ll take into account your goals, criteria, and preferences to find properties that are exactly what you were always dreaming of.
Start Here!
October 2021 Housing Market Update
The October 2021 Housing Market Update was held on October 19 at 12 p.m. If you missed the live webinar or would like to watch it again, it is available below.
Home Price Appreciation
Geoff Green, the host of the event, jumped right into the stats. First, there has been an amazing amount of appreciation taking place in the U.S. housing market. For example, the year-over-year average appreciation as of July 2021 was +19.2%. Of course, the pandemic has greatly impacted the market. In other words, many people decided to leave metropolitan areas and move to suburban and rural areas. Consequently, the lack of inventory, low mortgage rates, and a robust economy created a “feeding frenzy” of potential buyers.
The map below shows price appreciation by states and regions.
However, according to Ivy Zelman of Zelman & Associates,
“Closings are set to decline roughly 10% year over year in the 2nd half of 2021 and home price appreciation is on the cusp of flipping to a decelerating trend.”
Geoff stressed that decelerating means a slower amount of appreciation, and not a depreciation of value.
Mortgage rates and the impact on purchasing power
From January of 2020, rates plummeted down and bottomed out at beginning of 2021. They have been rising since. Mortgage rates have now jumped above 3%. Historically, these rates are still very low.
However, the chart below demonstrates how rising rates can impact your buying power.
More factors discussed
Geoff presented data on factors impacting the economy and the housing market. For instance, the rate of inflation, the high price of food, supply chain issues, oil prices, and more may impact the decision to buy or sell a home.
National Housing Market Stats
Existing home sales are starting to come down after last year’s numbers, but they are coming down softly. Average home sale price is appreciating at a lower rate. The months’ supply of inventory is actually starting to come up, but nowhere near the levels it has been or needs to be to meet demand.
Meet our Panel
Panelists for the October 2021 Housing Market Update are Tiffany Megna, Green Team New York Realty, Keren Gonen, Green Team New Jersey Realty, and Jessica Imparato, Cardinal Financial.
They discussed what they are seeing from their perspective, with “boots on the ground,” Despite stats showing the market softening, they have not seen a decline in their businesses. Jessica discussed how prospective buyers can be impacted by an increase in mortgage rates.
To see the entire presentation and panel discussion, click here To sign up for Housing Market Updates, click here.
“Housekeeping” Details