Rising Mortgage Rates?

After steadily falling over the winter, mortgage rates have started to rise in recent weeks. This is concerning to some potential homebuyers as the combination of higher mortgage rates and higher prices have made homes less affordable. So, if you’re planning to purchase a home this year, you too may be wondering if now’s the right time to buy or if you should hold off on your search until rates come back down.

The recent uptick in rates has been driven by what’s happening with inflation. Joel Kan, Vice President and Deputy Chief Economist at the Mortgage Bankers Association (MBA), explains:

“Mortgage rates increased across the board last week, pushed higher by market expectations that inflation will persist, thus requiring the Federal Reserve to keep monetary policy restrictive for a longer time.”

The most recent weekly average 30-year fixed mortgage rate as reported by Freddie Mac is 6.5%. It’s the third week in a row that rates have increased and puts them at the highest point they’ve been this year.

Advice for Home Shoppers

If you’re thinking about pausing your home search because rates have started to go up again, you may want to reconsider. According to the MBA, mortgage applications declined by 13.3% in just one week. This could actually be an opportunity to buy the home you’ve been seeking as some potential homebuyers pull back from the process. If you stay the course, you’ll likely face less competition among other buyers – welcome relief in a market with severely limited inventory.

If you are considering a purchase but feeling overwhelmed by the new swell in interest rates, reach out. I would love to empower you with my resources.