Historically low mortgage rates are a big incentive for homebuyers now. Only in 2020, tariffs reached a new one record-breaking 16 times, and the trend continued until the early part of this year. Many hopeful homeowners are now wondering if they should stop their plans and wait for the lowest rates. However, the reality is that acting sooner than later can be the actual win if you are willing to buy a home.
According to to Greg McBride, Chief Financial Analyst by Bankrate:
“While vaccines are more widely available and a return to normal is taking place, we will see mortgage rates rebound from record lows. “
While only a slight increase in mortgage rates is forecast for 2021, some experts believe they will start to rise. Over the past week, for example, the average mortgage rate has risen slightly, reaching 2.79%. This is still incredibly low compared to the trends we have seen over time. According to Freddie Mac:
“Borrowers are cleverly take advantage of these low rates now and will certainly benefit as a result. “
As mortgage rates rise, the increase affects the overall cost to buy a home. The higher the rate, the higher your monthly mortgage payment, especially as a home prices get up too. Sam Khater, Chief Economist at Freddie Mac, says:
“The forces behind the fall in tariffs have changed in recent months and rates are set to rise modestly this year. The combination of rising mortgage rates and rising house prices will accelerate the decline in affordability and further pressure potential homebuyers during the spring home sales season. “
What does this mean for buyers?
Right now, the inventory of houses for sale is also historically low, which makes it more difficult than normal to find a home to buy in many places. As more buyers shop in the typically busy spring shopping season, it may be even harder to find a home in the coming months. In view of this, Len Keifer, Deputy Chief Economist by Freddie Mac, recommended taking advantage of both low mortgage rates and the opportunity to buy:
“If you’ve found a home that’s right for your needs, at a price you can afford, it might be better to act now rather than expect future rate cuts that may never come and a future that probably has a very strict inventory. “
While today’s low mortgage rates give homeowners great opportunities, we may not see them staying forever. If you’re ready to buy a home, let’s connect so you can take advantage of what today’s market has to offer.
Content previously posted in Keep Current Things