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 you’re planning to purchase a home this year, you too may be wondering if
now’s 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 what’s happening
with inflation. Joel Kan, Vice President and Deputy Chief Economist at the
Mortgage Bankers Association.
Mortgage rates increased across
the board last week, pushed higher by market expectations that inflation will
persist, thus requiring the Federal Reserve to keep monetary policy restrictive
for a longer time.” The most recent weekly average 30-year fixed mortgage rate
reported by Freddie Mac is 6.5%. It’s the third week in a row that rates have
increased and puts them at the highest point they’ve been this year (see graph
below):
Advice for Home Shoppers
If you’re 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 you’ve 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, you’ll
likely face less competition among other buyers when you’re 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 doesn’t 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. Let’s connect today to
explore the options in our local market.