Mortgage Rates Will Probably Keep Rising, But Don't Fret
Over the past year, mortgage rates have hovered at or near record lows, with the popular 30-year fixed slipping as low at 4.71 percent this past December, according to data from Freddie Mac.
The same loan program is averaging 5.21 percent today, which is a half-point higher than the all-time low seen over the holidays.
Mortgage rates are now at their highest point in eight months, and are expected to continue rising as the economy improves.
The drawback to a recovery is rising rates, as good economic news generally pushes interest rates higher to corral inflation fears (how are mortgage rates determined).
The end of the Fed’s mortgage securities purchase program is also adding to the upward pressure, as private buyers must now pick up the slack left by the government’s exit.
Regardless, mortgage rates continue to be historically attractive, and shouldn’t climb too high anytime soon.
If mortgage rates were to rise significantly, housing would become less affordable, putting a fragile housing recovery at risk.
That said, mortgage rates alone, while trending higher, shouldn’t determine whether you’ll buy a home in the near future.
They’re certainly something to keep an eye on, but don’t feel you’ll miss the boat just because rates rise a bit more in the near term.
However, if you’re still looking to refinance, you may want to lock-in that rate sooner rather than later.