Homebuyers have been given a respite from steep hike in mortgage rates, a long-standing survey found, and are offering a spring treat to homebuyers who tire of rising borrowing costs and rising mortgage prices. houses.
Rates hold and remain at historically low levels, although they have jumped from their all-time low in early January.
This underscores the urgency for potential buyers and those still looking to refinance to get a loan before mortgage rates go up.
30-year fixed-rate mortgage average rate is 3.18%, mortgage giant Freddie Mac reported Thursday. That’s barely a change from the previous week’s rate of 3.17% in the 50-year survey.
Last week marked the seventh consecutive weekly jump in the 30-year benchmark rate and a new high for 2021.
The higher rates were driven by positive employment figures and consumer confidence, which prompted investors to return to the stock market, said Realtor.com economist Geroge Ratiu.
Yet rates have hardly ever been so low. They are down from a year ago, when the average rate was 3.33%, and significantly lower than two years ago, when the typical 30-year rate was above 4%.
Mortgage rates generally follow the path of Treasury bill yields, the interest rates the US government pays to borrow money. They increased modestly this week after President Joe Biden released details of his proposed infrastructure spending plan.
15 year mortgages
The average rate on a 15-year mortgage is unchanged at 2.45%, says Freddie Mac.
If you are thinking of refinancing yourself into one of the short term loans, now could be a good time, with mortgage rates in a lull. They are about to go higher, says Zillow economist Matthew Speakman.
“As the economy continues to thaw after the pandemic-induced freeze and government spending increases, the upward pressure on mortgage rates is expected to persist,” Speakman says.
A year ago, 15-year mortgage rates averaged 2.82%.
5/1 adjustable rate mortgages
The 5/1 adjustable rate mortgage averages 2.84%, also unchanged from the previous week, but down from 3.4% a year ago at this time, according to the ‘Freddie Mac survey, which focuses on borrowers who cut 20% and have excellent credit. .
These mortgages – also called ARMs – adjust after a set period at the start of the loan.
If you have an adjustable rate mortgage, maybe now is the time to consider refinancing to an attractive fixed rate with no surprises.
Rising rates pose challenges for buyers and homeowners
Keep in mind that your monthly mortgage payment could increase with the rates if you don’t have the cash to make a larger down payment.
With mortgage rates rising this year, a home buyer will now spend an extra $ 93 per month on a 30-year loan. That’s more than $ 1,100 per year and $ 33,000 over the life of the loan, says the realtor’s Ratiu.
The higher rates and soaring house prices have discouraged potential buyers from bidding on the houses. But there are reasons to be hopeful, as the spring sales season heats up.
“We expect to see more sellers emerge in the coming weeks, which should give buyers more options,” says Realtor.com chief economist Danielle Hale. “Homes will likely continue to sell quickly, but rising interest rates and monthly costs could slow the pace of price increases unless we see increased demand from regular buyers rich in stocks.”
Rising mortgage rates have also prompted homeowners to refinance, but mortgage technology and data provider Black Knight recently estimated that 11.1 million Americans with mortgages could still benefit from refinancing their homes.
Important Keys to Finding Low Fares Today
If you have a 30-year mortgage with at least 20% equity, your credit score is 720 or higher and you could reduce your current rate by three-quarters of a percentage point (0.75) by refinancing, you are in the first refi zone, says Black Knight.
Confused About Where Your Credit Score Is? Today it is very easy to check it for free.
Whether you are a potential buyer or a refinance, having a good credit rating is an important key to getting an attractive mortgage rate. Another is shopping.
Gather and compare mortgage offers from at least five lenders to find the lowest rate you can qualify for. More than one study has found that a borrower who reviews five rate offers will save thousands more over time than someone who stops after receiving an offer from just one lender.
And although mortgage rates are not so unbelievably low like a few months ago, you still have other ways to reduce your housing costs. Use your comparison skills when purchasing or renewing your home insurance to find the best price for your policy.