What’s going on with mortgage rates these days?
It seems that both home buyers and mortgage bankers have been trying all year long to figure out something – how long will interest rates remain low?
That’s a good question, of course, because low mortgage rates translate into low payments on home loans. Low rates mean your average buyer can afford a more expensive home than he or she might be able to under ordinary circumstances.
And, yes, we’ve been living under extraordinary circumstances for the better part of the year. According to Mortgage-x.com, the national average rate on a 30-year, fixed interest mortgage has been below 5 percent since early May. To put that in context, bear in mind that people were celebrating their good fortune just a couple of years ago when rates were around 6.5 percent.
Truth be told, mortgage rates are still very low. However, they’ve been rising steadily for the past few weeks. According to Mortgage-x, the average interest rate on a 30-year mortgage was 4.17 percent on Nov. 12 and had risen to 4.83 percent by Dec. 17.
How about 15-year, fixed interest mortgages? The average rate on those was 3.57 percent on Nov. 12 and had risen to 4.17 percent by Dec. 17.
While it’s clear that mortgage rates have gone up a bit, they’re still very low. Mortgage-x runs a weekly Mortgage Rate Trend Survey in which the organization asks industry insiders what they think will happen with mortgage rates within the next 30 and 90 days.
About 250 mortgage professionals were asked their opinion for the Dec. 20 survey. The results show people don’t expect things to change just a whole lot in the immediate future – 50 percent of them expected no change within the next 30 days and 45 percent expect no change within the next 90 days. Also, 35 percent of the respondents expect rates to increase slightly within the next 30 days and 25 percent expect to see a slight rise within the next 90 days. One more thing – 25 percent of the respondents expect to see a slight decline in rates within the next 90 days.
In short, it seems as difficult as ever to figure out exactly what will happen with rates in the short term. Here’s what we do know – rates will almost certainly go up at some point in the future and they are clearly hovering around historic lows right now.
For people in the position to take out a mortgage, then, these are good times. Interest rates remain low and we’ve seen there’s downward pressure on home prices. In short, buyers searching for homes right now may find they can get larger homes than they could have afforded a few years ago and lock in a very favorable mortgage rate, to boot.
Throw in the fact that inventory – the number of homes for sale – is rising in most markets throughout Arkansas and buyers have a lot of homes from which to choose, too. Prospective buyers who wait around for too long may find themselves looking at increasing mortgage interest rates and rising home prices.
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.