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 isnt going away any time soon.
But as a homebuyer, what do rates above 3% really mean?
Todays Average Mortgage Rate Still Presents Buyers with a Great Opportunity
Buyers dont want mortgage rates to rise, as any upward movement increases your monthly mortgage payment. But its important to put todays average mortgage rate into perspective. The graph below shows todays rate in comparison to average rates over the last five years:
As the graph shows, even though todays rate is above 3%, its still incredibly competitive.
But todays rate isnt just low when compared to the most recent years. To truly put today into perspective, lets look at the last 50 years (see graph below):
When we look back even further, we can see that todays 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 its 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 its true todays average mortgage rate is higher than just a few months ago, 3% mortgage rates shouldnt deter you from your homebuying goals. Historically, todays rate is still low. And since rates are expected to continue rising, buying now could save you money in the long run. Lets connect so you can lock in a great rate now.
