Mortgage rates have risen notably this week, reaching their highest level since July last year.
According to the Mortgage Bankers Association, the average 30-year mortgage rate is currently 3.23%, up from 3.08% last week, the largest weekly rise in almost a year.
Bumps can be costly for borrowers who failed to lock rates last week. With a $ 250,000 loan, the monthly payment difference is only about $ 21. However, for the life of the mortgage, the difference will be more than $ 7,000.
Why is it going up?
This is not the first increase in prices since the beginning of 2021, but it is the largest.
Interest rates have risen in recent weeks, rising from 2.86% at the beginning of the year and just below 3% for most of February. Prices reached a record low in December last year.
According to Michael Blake, president of Fairway Independent Mortgage’s capital markets, there are many reasons for the recent rise in interest rates. However, it is primarily positive data surrounding retail sales, manufacturing and other important market indicators.
“All of these show a strong economic recovery at some point, causing inflation,” Blake said.
Another factor at work? That’s the latest vaccine news and what that means for the economy.
“As more people get vaccinated, that means we’re getting closer to returning to business,” said Melissa Korn, executive mortgage bunker at William Laveys Mortgage. “When combined with new stimuli, it shows inflation, which is equal to a higher rate.”
Will prices continue to rise?
Interest rates can continue to rise as the economy recovers from the pandemic. How much (or when) is uncertain, but Blake expects the rise to be “moderate.”
“I can’t say when that will happen,” Blake said. “But as the economy gets stronger, we can expect interest rates to rise gradually.”
For buyers on the fence, or homeowners considering potential refinancing, it may be wise to fix interest rates now. Locks usually last 30-90 days and can protect you from rising interest rates while you wait for the loan deadline.
“If you like the quoted rate, you should fix it now,” Korn said. “The more good economic news we get, the higher the rate will go.” Make sure the application is ready and the lender is ready to close before the lock expires. please.
Mortgage rates have reached their highest level since July last year. Will they keep rising?
https:///sites/alyyale/2021/03/03/mortgage-rates-hit-highest-point-since-last-july-will-they-keep-rising/ Mortgage rates have reached their highest level since July last year. Will they keep rising?