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What's Going On With Interest Rates?

Updated: Sep 22, 2021

Mortgage rates have been hovering near record lows since the pandemic began, and that’s good news for today’s homebuyers. The graph below from Fannie Mac shows mortgage rates dating back to 2016 and where today falls by comparison.




Generally speaking, when rates are low this allows you to afford a higher purchase price than if they were higher. This is presenting home buyers with an incredible opportunity, and many experts are optimistic about purchasing in this low interest rate environment. Here’s what a few of them are saying:

Sam Khater, Chief Economist at Freddie Mac, points out the historic nature of today’s rates:

“As the economy works to get back to its pre-pandemic self, and the fight against COVID-19 variants unfolds, owners and buyers continue to benefit from some of the lowest mortgage rates of all-time.”

Mark Fleming, Chief Economist at First American, talks about how rates impact a buyer’s bottom line:

“Mortgage rates are generally the same across the country, so a decline in mortgage rates boosts affordability equally in each market.”

Danielle Hale, Chief Economist at realtor.com, also notes the significance of today’s low rates and urges buyers to carefully consider their timing:

Those who haven’t yet taken advantage of low rates to buy a home or refinance still have the opportunity to do so this summer.”

Hale goes on to say that buyers who don’t act soon could see higher rates in the coming months, negatively impacting their purchasing power:

“We expect mortgage rates to fluctuate near historic lows through the summer before beginning to climb this fall.”


And while mortgage rates are still low today, the data from Freddie Mac indicates rates are fluctuating ever so slightly right now, as they moved up one week before inching slightly back down in their latest release. It’s important to keep in mind the influence rates have on your monthly mortgage payment. There are upcoming FED meetings which could influence rates, and cause the FED to start "tapering." (buying less mortgage backed securities, therefor causing rates to increase.)


Even small increases can have a big impact on what you pay each month. Trust the experts. Today’s rates give you opportunity and flexibility in what you can afford. Don’t wait on the sidelines and hope for a better rate to come along; the rates we’re seeing today are worth capitalizing on. Get Started today, by hitting the apply now button linked to this blog.


Are We In A Housing Bubble?

This is one of the most common questions I am getting. Should I wait? Is the bubble going to burst?


The latest Mortgage Bankers Association data shows that home purchase applications are down 18% year over year. The media is interpreting this as bad news for the housing market, saying the housing boom is over. But what’s really going on?


When you take a closer look, cash buyers aren’t captured in the mortgage application data because they’re not applying for a mortgage. When we figure in the big increase year over year in cash buyers, there's still a decline in the amount of purchase applications, but it's not 18%, it's 9%.


Plus, there are fewer homes available for sale because inventory is down 20% from a year ago. However, the demand for homes is very strong, and should continue to be strong because of very favorable demographics. It's just more challenging to buy a home because there are more people looking to buy and less homes available. Plus, it's even harder for builders to complete homes right now because the chip shortage is making appliances hard to deliver, too.


So, all these factors come into play when you consider what's going on in the housing market. The high demand and tight supply should continue to be supportive of home price appreciation, plus with rates still historically low, there’s still a big reward for people ready to purchase a home.


Bottom Line

Mortgage rates hover near record lows today, but experts forecast they’ll rise in the coming months. Waiting could prove costly when that happens. Talk to your trusted mortgage advisor to discuss today’s rates and determine if now’s the time for you to buy.


- Cache Nies

- NMLS #1793984

- An Equal Housing Lender


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