How Global Uncertainty is Impacting Mortgage Rates
/If you’re thinking about buying or selling a home, you’ll want to keep a pulse on what’s happening with mortgage rates. Rates have been climbing in recent months, especially since January of this year, with the 30-year fixed mortgage rate from Freddie Mac exceeding 4%. But what does that mean for you as a homebuyer? Should you buy now? Wait it out? We’ll help you answer those questions.
Why are mortgage interest rates increasing?
In the first 45 days of the year, we saw a brief decline in interest rates due in part to growing uncertainty and geopolitical tensions surrounding Russia and Ukraine, as well as changes around the COVID-19 pandemic.
“Geopolitical events play an important role in impacting the long end of the yield curve and mortgage rates. For example, in the weeks following the ‘Brexit’ vote in 2016, the U.S. Treasury bond yield declined and led to a corresponding decline in mortgage rates,” Odeta Kushi, Deputy Chief Economist at First American explained. While experts say that this decline is to be expected, it was short-lived.
With increasing inflation and forthcoming interest rate hikes from the Federal Reserve, interest rates have been driven 1.5% higher over the past few months, up from 3.15 percent on Nov.10.
Will interest rates continue to rise?
While rates have fluctuated slightly over the last few weeks based on what’s happening globally, they’ve continued on an upward trajectory, and experts project rates will continue to climb in the coming months.
What should I do?
If you’re in the market to buy a home, doing so before rates rise any higher may be your most affordable option – especially when you keep in mind that even 4%+ is an historically good rate (just compare it to the early 1980s where rates rose to 16.63%).
Mortgage rates are an important piece of the puzzle because they impact you’re buying power. In addition, when rates rise, you can end up qualifying for less or having to pay a bigger monthly mortgage payment for the same priced home.
We can help you decide when the best time to buy and sell is, as well as connect you with trusted lenders who can provide you with up-to-date information on rates and trusted advice on how to time your next move. Send us an email today!