BOSTON, MA – Mortgage rates have recently reached their highest levels in the past 12 months with 30 year fixed rates now approaching 4%. The last time mortgage rates were this high was on Dec. 12, 2015, when rates were 3.97%.
The increase in rates is generally being attributed to favorable business expectations in light of President-elect Donald Trump’s announced tax and business initiatives which have pushed the Dow Jones 30 stock average to record levels above 19,000. Also, recent remarks by Federal Reserve Chair Janet Yellen have made it a foregone conclusion that the Fed will be raising interest rates in the near future.
Anticipation surrounding these two factors have pushed up mortgage rates significantly, approaching .75% higher than the low of 3.32% on September 27, 2016 for 30 year rates.
“Those looking to save money on their mortgage expense may want to consider 5, 7, or 10 year adjustable rate mortgages where rates are in the 3.00%, 3.25%, and 3.50% range, respectively,” notes Jonathan Slater, President of Newton, MA-based Castles Luxury Properties.
“Given that the average homeowner’s tenure is generally 7 years, these shorter term fixed rates make the most sense for many home and condo buyers in Newton, Brookline and throughout Greater Boston,” he adds.
Slater estimates that a .50% change in interest rates costs a $1 million borrower approximately $284/month in additional mortgage payments.
Rates referenced above are based on historical pricing provided by Bloomberg.com. For the annual rate chart see here: