Recently Freddie Mac, one of America’s leading mortgage lending giants, announced that their 30-year fixed-rate mortgage interest rate was at just over 3%, 3.02% to be exact. This is the first time that mortgage rates have been at the 3 percentile since July of 2020. This rate hike became the headline of many news stories as soon as it was released from Freddie Mac. Many articles reported on the negative impact it will have for buyers.
Upon hearing this news, homebuyers and those looking to refinance should remember two key factors:
This increase in rates was long predicted since last fall. Many market experts had reported for several months that home buyers and refinancers should expect rates to increase as 2020 and 2021 progress.
Freddie Mac has reported that rates will not climb as steeply or rapidly into the next few months. Freddie Mac is still expecting that Spring 2021 will bring a strong real estate season.
What Does the Recent Increase in Mortgage Rates Mean for Those Seeking a New Mortgage?
Of course, anyone looking to open a new mortgage loan be it through purchasing a new home or refinancing their current home loan will want mortgage rates not to climb at all, instead, they would like to see rates decline. Any upward movement in a mortgage interest rate means an increased monthly payment for a mortgage borrower. When we look at the current mortgage rate as compared to the very recent past few years a 3.02% rate is still a low rate. Here are the Freddie Mac annual mortgage rate percentage averages for the last five years:
- 2016: 3.65%
- 2017: 3.99%
- 2018: 4.54%
- 2019: 3.94%
- 2020: 3.11%
The current 3.02% Freddie Mac rate is above the high 2% rates that preceded it for seven weeks, but it is not too much larger than the all-time lowest interest rate offered in December of last year at 2.66%. Taking a deeper look into past mortgage rate averages over the last several decades a 3% mortgage rate looks even more positive and promising. Here are the mortgage rate averages for the last 50 years:
- 1970s: 8.86%
- 1980s: 12.7%
- 1990s: 8.12%
- 2000s: 6.29%
- 2010s: 4.09%
Don’t be discouraged or think that you missed your window to apply for a new mortgage, because you missed the high 2% mortgage rates of just a few weeks ago. It is understandable to be disappointed, but do not give up altogether on purchasing or refinancing. Purchasing a home right now or refinancing (if your current rate is well above 3%) still makes sense as mortgage rates are only predicted to continue to rise.
The best way to ensure you are receiving the best rate and costs possible is to work with a knowledgeable mortgage broker that will do all of the shopping and comparing for you. For information on discovering your mortgage options in Mission Viejo and California please contact me any time.
Additional Resources
- 50 Ways You Might Get Declined for a Mortgage
- Can you buy real estate with cryptocurrency?
- Pros and Cons of Applying for a Mortgage with your spouse
- 5 Steps to Protecting Your Credit Score During a Pandemic
- 5 Things NOT to Say When Applying for a Mortgage
