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 youโre planning to purchase a home this year, you too may be wondering if nowโs 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 whatโs happening with inflation. Joel Kan, Vice President and Deputy Chief Economist at the Mortgage Bankers Association (MBA), explains:
โMortgage rates increased across the board last week, pushed higher by market expectations thatย inflation will persist, thus requiring the Federal Reserve to keep monetary policy restrictive for a longer time.โ
The most recent weekly average 30-year fixed mortgage rate reported by Freddie Mac is 6.5%. Itโs the third week in a row that rates have increased and puts them at the highest point theyโve been this year (see graph below):
Advice for Home Shoppers
If youโre thinking about pausing your home search because rates have started to go up again, you may want to reconsider. This could actually be an opportunity to buy the home youโve been searching for. According to the MBA, mortgage applications declined by 13.3% in just one week, so it appears the rise in mortgage rates is leading some potential homebuyers to pull back on their search for a new home.
So, what does that mean for you? If you stay the course, youโll likely face less competition among other buyers when youโre looking for a home. This is welcome relief in a market that has so few homes for sale.
Bottom Line
Over the last few weeks, mortgage rates have risen. But that doesnโt mean you should delay your plans to buy a home. In fact, it could mean the opposite if you want to take advantage of less buyer competition. Letโs connect today to explore the options in our local market.
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