Today’s housing market is truly one for the record books. Over the past year, we’ve seen the lowest mortgage rates in history. And while those rates seemed to bottom out in January of this year, the golden window of opportunity for buyers isn’t over just yet. If you’re working with buyers who worry they’ve missed out on the best rates and are waiting for them to drop again, remind them that today’s current rates are still worth taking advantage of.
Even with some recent climbs, mortgage rates are still well below what they’ve been in recent decades. So, while a buyer may not be able to lock in the rate a friend got in late July, they’re still in a great position to secure a rate well below what their parents and even grandparents got in years past. The key will be acting sooner rather than later.
In late September, mortgage rates ticked above 3% for the first time in months. And according to experts throughout the industry, mortgage rates are projected to continue rising in the months ahead. Here’s where experts say rates are headed:
While to some clients a projected half percentage point increase may not seem substantial, they need to recognize it does have an impact regarding affordability. When rates rise even slightly, it affects how much they’ll pay month-to-month for the home loan. The chart below is a good tool to demonstrate exactly how it works:
In this example, if rates rise to 3.55%, they’ll pay an extra $100 each month on a monthly mortgage payment if purchasing a home around this time next year. That extra money can really add up over the life of a 15 or 30-year loan, equaling $36,000 if they stick with the same mortgage for its entire lifespan.
Clearly, today’s mortgage rates are worth taking advantage of before they climb further. The rates we are seeing right now create a unique opportunity to afford more home for the money while keeping a monthly payment down.
Bottom Line
Clients continuing to wait for a lower mortgage rate could cost them quite a bit, as experts project rates will continue to rise in the months ahead. Connect with your buyers to seize the current opportunity before they increase further.
