What’s happening with mortgage interest rates currently? The cost of lending is currently going up with rising mortgage rates. This is going to end up affecting both homeowners and borrowers. As of June 2022, the mortgage rates are two points higher than what they were at the beginning of the year. While many have been hoping for the rates to fall, it’s likely still going to be some time before that happens.
Why Are the Rates Rising?
What is causing the rates to go up? One of the reasons that they are on the rise is because of rising inflation. The CPI (consumer price index) went up to 8.5%, which is the highest it has been since 1981. However, it’s important to note that it’s not just the inflation that is causing the increased mortgage rates. The Federal Reserve also started increasing rates in March. The last time this happened was in 2018.
Freddie Mac reported that the rates for 30-year fixed mortgages are already more than 5%. Compare this to what it was around this time last year…2.99%. That’s quite a jump in a relatively short period.
What Are the Coming Predictions?
While no one can see the future, there are some predictions for mortgage interest rates. It’s believed by many experts that the fixed mortgage rates will likely be increasing by the time 2022 is over. It could be up to 5.5%. Most experts agree that the rates are not going to have any significant decreases in the coming year.
What does this mean for you? While it may be a little costlier to buy a home now, it could still be a good idea if you find the right deal on a home you love.
Refinancing Options
Keep in mind that it should also be possible to refinance when the rates go down. Others might be in a place where they could refinance now and find that it will be a better deal than their current mortgage.
Keep in mind that refinancing could help to provide you with lower monthly payments. However, it might not mean that you’ll be paying significantly less in interest over the life of the loan. Of course, the rate you will end up getting is also going to depend on a range of factors including your credit score, loan-to-value ratio, and debt-to-income ratio. Talk with an expert to figure out what’s right for you.
If your looking to buy a home, contact The Realty Group Team! Our experienced agents will help you through the whole process.