With Mortgage Rates Climbing, Nows the Time To Act

By
Real Estate Agent with HomeSmart 0561240

Last week, the average 30-year fixed mortgage rate from Freddie Mac jumped from 3.22% to 3.45%. Thats the highest point its been in almost two years. If you're thinking about buying a home, this news may have come as a bit of a shock. But the truth is, it wasn't entirely unexpected. Experts have been calling for rates to rise in their 2022 projections, and the forecast is now becoming a reality. Here's a look at the projections from Freddie Mac for this year:

  • Q1 2022: 3.4%
  • Q2 2022: 3.5%
  • Q3 2022: 3.6%
  • Q4 2022: 3.7%

As the numbers show, this jump in rates is in line with the expectations from Freddie Mac. And what they also indicate is that mortgage rates are projected to continue climbing throughout the year. But should you be worried about rising mortgage rates? What does that really mean for you?

As rates increase even modestly, they impact your monthly mortgage payment and overall affordability. If you're looking to buy a home, rising mortgage rates should be an incentive to act sooner rather than later.

The good news is, even though rates are climbing, they're still worth taking advantage of. Historical data shows that todays rate, even at 3.45%, is still well below the average for each of the last five decades (see chart below):

With

That means you still have a great opportunity to buy now with a rate that's better than what your loved ones may have paid in decades past. If you buy a home while rates are in the mid-3s, your monthly mortgage payment will be locked in at that rate for the life of your loan. As you can see from the chart above, a lot can change in that time frame. Buying now is a great way to protect yourself from rising costs and future rate increases while also securing your payment amount for the long term.

Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says:

Mortgage rates surged in the second week of the new year. The 30-year fixed mortgage rate rose to 3.45% from 3.22% the previous week. If inflation continues to grow at the current pace, rates will move up even faster in the following months.

Bottom Line

Mortgage rates are increasing, and they're forecast to be even higher by the end of 2022. If you're planning to buy this year, acting soon may be your most affordable option. Lets connect to start the homebuying process today.

 

Posted by

e signature for Shayne Stone

“YOUR Rock-Solid Choice Realtor for Making Home Sellers a Profit & Home Buyers Equity”

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Comments (4)

Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Shayne. Do we pay to much attention to mortgage rates and not enough to actual opportunity? If a quarter or even half point bump puts you out of the market perhaps you were never a good candidate anyway. Enjoy your day

Jan 22, 2022 05:41 AM
Bill Salvatore - East Valley
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net

Thanks for the post.  Have a great weekend. bill 

Jan 22, 2022 05:42 AM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great information.  Thanks for sharing and have a wonderful day!

Jan 22, 2022 06:39 AM
Ray Henson
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA
Realtor

It will be interesting to see what happens to interest rates this year with the Fed finally threatening to act after letting inflation go to 7%.  Freddie Mac might be too optimistic.

Jan 22, 2022 06:57 AM