An Increase in Mortgage Rates

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primary mortgage marketplace chartSince the start of the Covid-19 pandemic in early 2020, the national mortgage rates have been on a steady decline to a near record low of 2.79%. When things started to “normalize” again in early 2021, the rates being to rise again, to around 3.2%. At the beginning of 2022 they reached 3.45% as the average rate for a 30-year fixed-rate loan.

This has increase has been a three straight week trend as of January 13, 2022. While this may seem like a minor 1% increase, the historic lows allowed a wider population to have the opportunity to purchase a home. However, we also saw the dramatic increase in home prices. With increasing asking prices and a rising mortgage rate, many would-be buyers are being pushed out of the market, explains Orla McCaffery, Wall Street Journal. The National Association of Realtors recorded a 13.9% increase to median home price from a year prior. Sam Khater, chief economist at Freddie Mac states, “Given the fast pace of home price growth, [higher rates] will likely dampen demand in the near future.”

Prior to the global pandemic, mortgage rates reached annual averages of 13% in the 80s, 8% in the 90s, around 5.5% in the 2000s, and leveled out around 4% in the 2010s. We are watching closely to see whether the rate will continue to rise or start to decrease again. Please let us know if you have any questions about the real estate market.

Read The Wall Street Journal’s article here: https://www.wsj.com/articles/mortgage-rates-jump-to-highest-level-since-march-2020-11642092479