Let’s not mince words, interest rates are high…the highest we have seen since 2019 in fact. After nearly 4 years of sub 3% rates on 30-year fixed rate mortgages, a 5% (4.33% on average) rate and in many places higher has many thinking twice about taking on a new home loan. However, borrowers find themselves historically in one of the cheapest times to take home loans.
Over the last 30 years the average home interest rate for a 30 year fixed mortgage has steadily decreased from 9.25% in 1991 to 4.09% at the end of 2022. Although rates today seem to be ever changing, having the ability to refinance within 6 months of purchasing gives the home-buyers an opportunity to fall in love with a home and adjust their loan in the event rates.
James Lawrence, the broker for Preferred Residential Properties, has a response to those who are shy of purchasing during a time of slightly raised rates. “We recently had a client who just got a rate of 5.75%, that’s 2% lower than the 30 year average. He can refinance in 6 months if interest rates drop…date the rate, marry the house!”
For more information on both historic interest rates and where rates are possibly headed please see the referenced links below.
https://www.macrotrends.net/2015/fed-funds-rate-historical-chart
https://www.valuepenguin.com/mortgages/historical-mortgage-rates
https://www.nytimes.com/2023/01/30/business/economy/inflation-rate-fed.html
