This year’s historically low mortgage rates have been a boost to buyers and sellers alike. Great rates have brought out the “I might buyer this year” buyers and sent them into action, encouraged buyers to purchase a bit more house, and encouraged sellers to list while the rates are low.
Then, in a flash, rates jumped 20 basis points immediately following the election results amid a wacky post-election bond market. The most recent update from the Mortgage Bankers Association (MBA) tells us that 30-year fixed-rate mortgages (FRM) spiked to 3.95% from 3.77%. A bit shocking for many.
But let’s add some perspective: last year at this time, the 30-year FRM averaged 3.97%.
And while the MBA also noted that mortgage application volume fell 9.2% last week compared to the previous week, real estate agents are seeing consumers reacting with a sense of urgency to lock in a good rate before it’s too late.
We’ve seen these historically low rates for a while so the entire industry has been wondering when the rate-rising moment could come and whether it would be gradual or swift. Swift it was--at least the start.
As a buyer, you should continue to explore the housing market and be prepared, and plan, for a rise in the rate you may have been quoted this Summer. Just know, it isn't doom and gloom. The kind of increase we will likely see over the next year will have only a nominal increase on monthly payments for a 30-year fixed rate mortgage.
And one more bit of perspective: over the past 45-years, the average for interest rates has been 8.24%, and we are still below 4% even with our swift rise this month.