If you’re concerned about the recent rise in mortgage rates, I want to reassure you—things are much better than they might seem.
Yes, mortgage rates have certainly risen. From a low of 3.44% last August, the 30-year fixed mortgage rate reached 4.12% recently.
This increase means that if you took out a 30-year mortgage on a $250,000 home, you’d pay almost $100 more each month. Your overall mortgage cost would be almost $35,000 higher. That’s a sizeable change, and it’s got some people nervous about a possible slowdown in the real estate market.
However, the current rise in rates is unlikely to affect the real estate market any time soon. The rates we saw last year were an all-time record low. Historically, rates have been far higher.
Ten years ago, the same 30-year mortgage rate stood at 6.34%. For much of the 90s, rates hovered between 7% and 10%. Throughout the 80s, average annual rates never dipped below 10%. In 1982, they were as high as 16%. When viewed in this context, it’s clear that current mortgage rates are still very low, and that the real estate market is actually in a very good place.
So what does this mean for you?
First, if you are looking to buy a home, the current low rates offer a great opportunity to afford an amazing home. Second, if you’re looking to sell your home, you are in a great position to do so quickly and at top price.
Last December saw a drop in home sales, but not because of any rise in mortgage rates. Instead, this slowdown was due to a constrained supply of new homes. In fact, there are plenty of eager buyers around Mansfield and prices continue to rise.
If you want to discuss upcoming trends in mortgage rates and how they could affect you—whether you’re buying or selling a house—give me a call or send me an email. I’d be happy to help however I can.