Last Thursday, Freddie Mac announced that their 30-year fixed mortgage rate was over 3% (3.02%) for the first time since last July. That news dominated real estate headlines that day and the next. Articles talked about the โnegative impactโ it may have on the housing market. However, we should realize two things:
1. The bump-up in rate should not have surprised anyone. Many had already projected that rates would rise slightly as we proceeded through the year.
2. Freddie Macโs comments about the rate increase were not alarming:
โThe 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.โ
A โmutedโ rise in rates will not sink the real estate market, and most experts agree that it will be โa strong spring sales season.โ
What does this mean for you?
Obviously, any buyer would rather mortgage rates not rise at all, as any upward movement increases their monthly mortgage payment. However, letโs put a 3.02% rate into perspective. Here are 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 sub-3% rates we saw over the previous seven weeks, itโs still very close to the all-time low (2.66% in December 2020).
And, if we expand our look at mortgage rates to consider the last 50 years, we can see that todayโs 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%
Being upset that you missed the โbest mortgage rate everโ is understandable. However, donโt throw the baby out with the bathwater. Buying now still makes more sense than waiting, especially if rates continue to bump up this year.
Bottom Line
Itโs true that you may not get the same rate you would have five weeks ago. However, you will get a better rate than what was possible at almost any other point in history. Letโs connect today so you can lock in a great rate while they stay this low.
Content previously posted on Keeping Current Matters
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