In 2020, buyers got a big boost in the housing market as mortgage rates fell throughout the year. According to Freddie Mac, taxes hit an all-time low 12 times this year, soaking less than 3% for the first time ever buying a home more and more attractively over the course of the year (See graph below):
When you constantly hear how rates are reaching record lows, you may be wondering: Will they continue to fall? Should I wait until they get even lower?
The Challenge with Expectation
The challenge with waiting is that you can easily miss this optimal window of time and then end up paying longer. Last week, mortgage rates rose slightly. Sam Khater, Chief Economist at Freddie Mac, explains:
“Mortgage rates jumped this week as a result of positive news about vaccine COVID-19. Despite this increase, mortgage rates remain about one percent lower than a year ago. “
Although rates are still lower today than they were a year ago, as the economy continues to strengthen and the pandemic resolves, there are very good chances that interest rates will rise again. Several major institutions in the real estate industry are projecting an increase in mortgage rates over the next four quarters. (See diagram below): If you plan to wait until next year or so, Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), forecasts mortgage rates will start steadily to get up:As a buyer, you need to decide if waiting makes financial sense for you.
If you are planning to buy a house and want to take advantage of today’s low rates, now is the time to do so. Don’t assume they will stay that low forever.
Content previously posted in Keep Current Things