The 30-year fixed mortgage rate from Freddie Mac is beginning to rise above 3%, and has become top of mind for those looking to buy a home. Unfortunately, experts are saying that rates will continue to go up as time goes on. Let’s take a deeper dive into what rates above 3% really mean.
Today’s Rates are Still Great for Buyers:
Upward movement in the interest rates will cause buyers monthly mortgage payments to increase. However, it’s important to put the current rates into perspective. Below you will find a graph sharing the average interest rate over the past five years.
Even though today’s rate is above 3%, it is still significantly lower than years past. Not just the past few years either. When we look at the average interest rates over the last 50 years, our recent 3% rate is almost shocking.
Compared to the average rate in the 80’s, today’s 3% rate is remarkable!
What Does the 3% Mortgage Rate Mean for You?
Many people who were waiting for rates to drop just a little more before they bought a home are beginning to stress. However, today’s “higher” interest rates shouldn’t be holding you back from buying your dream home if you’re in the market. Especially considering that experts predict that mortgage rates will slowly continue to increase. Mark Fleming from First American says,
"Rising mortgage rates, all else equal, will diminish house-buying power, meaning it will cost more per month for a borrower to buy ‘their same home.’”
Bottom Line
The current mortgage rate is currently higher than it was in the last three months and is predicted to continue to rise over the next year. However, our current average interest rate is still significantly lower than it has been in the past 50 years (on average)! If you’re ready to start your homebuying journey or want to see if now is a good time for you to buy, connect with our team to get started! Our team of local and experienced mortgage bankers are standing by to analyze your unique financial picture and goals and match you with the perfect mortgage.