With the average 30-year fixed mortgage rate climbing above 3%, rising rates are one of the big topics of discussion in the housing market today. But as a homebuyer, what do 3% mortgage rates really mean?
Today’s Rates Still Give Buyers Great Opportunity
Buyers don’t want mortgage rates to rise, as any upward movement increases your monthly mortgage payment when you purchase a home. But it’s important to put today’s average mortgage rate into perspective. Even though rates today are climbing back into the 3% range, they’re still incredibly competitive. To truly give you the full picture, take a look at the last 50 years (see graph below). Looking back, today’s rate is outstanding by comparison.
What Does This Mean for You?
Being upset that you may have missed out on sub-3% mortgage rates is understandable. But it’s important to realize, buying now still makes sense, as experts project rates will continue to rise. And when rates rise, it will cost more to purchase a home.
As Mark Fleming, Chief Economist at First American, explains:
“Rising mortgage rates, all else equal, will diminish house-buying power, meaning it will cost more per month for a borrower to buy ‘their same home.’”
In other words, the longer you wait, the more it will cost you. Being educated and informed on the homebuying process is incredibly important today, so you can make the best possible decision about when to purchase a home.
While it’s true today’s average mortgage rate is higher than it was a few months ago, 3% mortgage rates shouldn’t deter you from your homebuying goals. Historically, today’s rate is still low. Consider this an opportunity rather than a hurdle. Let’s connect so you can lock in a great rate now.