Should You Be Concerned about 3% Mortgage Rates?
Freddie Mac recently announced that their 30-year fixed mortgage rate was over 3% for the first time since July of 2020. Since that announcement hit the news, articles have talked about the negative impact it may have on the housing market. However, before we jump to conclusions, we should realize two very important things:
1. The bump-up in rate should not have been surprising. Many experts had already projected that we would see a slight rise in rates as we proceeded through the year.
2. A muted rise in rates will not sink the real estate market.
“The rise in mortgage rates over the next couple of months is likely to be more muted in comparison to the last few weeks, and we expect a strong spring sales season,” he explained.
A muted rise in rates will not sink the real estate market, and most experts agree that it will be a strong spring sales season.
What does this mean?
It’s no surprise that any buyer would rather have mortgage rates not rise at all, as any upward movement has an impact on their monthly mortgage payment. However, let’s put a 3.02% rate into perspective for a second.
let’s take a look at the Freddie Mac annual mortgage rates for the last five years:
- 2016: 3.65%
- 2017: 3.99%
- 2018: 4.54%
- 2019: 3.94%
- 2020: 3.11%
Though 3.02% is not as great as the rates we saw over the previous seven weeks, it’s still very close to the all-time low of 2.66% in December 2020.
If we take this one step further and we expand our look at mortgage rates to consider the last 50 years, we can see that today’s rate is truly outstanding.
Here are the rates over the last five decades:
- 1970s: 8.86%
- 1980s: 12.7%
- 1990s: 8.12%
- 2000s: 6.29%
- 2010s: 4.09%
Buying now still makes more sense than waiting, especially if rates continue to bump up this year.
It’s true that you may not get the same rate you would have five weeks ago. However, the data shows that you will get a better rate than what was possible at almost any other point in history.
Let’s connect today so you can lock in a rate while they are this low!