Freddie Mac announced on March 4 that their 30-year fixed mortgage rate was over 3% for the first time since last July. That news dominated real estate headlines that day and the next. Articles talked about the “negative impact” it may have on the housing market. However, we should realize two things: The bump-up in rates should not surprise anyone. Many had already projected that rates would rise slightly as we proceeded through the year. Freddie Mac’s comments about the rate increase were not alarming: “The rise in mortgage rates over the next couple of months is likely to be more muted in comparison to the last few weeks, and we expect a strong spring sales season.” A “muted” rise in rates will not sink the real estate market, and most experts agree that it will be “a strong spring sales season.” Obviously, any buyer would rather mortgage rates not rise at all, as any upward movement increases their monthly mortgage payment. It’s important to note that a rise in interest rates does single improvement in the economy – something we can all look forward to after the past 12 months. Though 3.02% is not as great as the sub-3% rates we saw over the previous seven weeks, it’s still very close to the all-time low (2.66% in December 2020). And, if we expand our look at mortgage rates to consider the last 50 years, we can see that today’s rate is truly outstanding. Here are the rates over the last five decades:
- 1970s: 8.86%
- 1980s: 12.7%
- 1990s: 8.12%
- 2000s: 6.29%
- 2010s: 4.09%
Being upset that you missed the “best mortgage rate ever” is understandable, but buying now still makes more sense than waiting, especially if rates continue to bump up this year.
