(Newswire.net — March 29, 2021) — Getting a mortgage has always been a tough thing to do because it requires time and money. Now that there is still a pandemic, many are just starting to wonder whether it’s the right time to purchase a property. It’s just right to wonder but what you should know is that it is a good time to buy a house today.
People are quite in a hurry to settle mortgage deals right now because the rates are nearing record lows at the moment. This is greatly beneficial to people who haven’t bought or have refinanced their homes just yet.
Mortgage Rates This Year
Freddie Mac released its latest data on mortgages recently, and according to the report, the fixed mortgage rates, particularly the ones for 30 years, have slipped to 2.73 percent from how it was a week ago, which was at 2.77 percent. There is quite a difference from how it was last year, which was at 3.51 percent.
Meanwhile, the 15-year fixed-rate average also went down to 2.20 percent. Last week, this was at 2.21 percent and a year ago, this was at 3 percent. What remains unchanged is the five-year adjustable-rate average which is at 2.80 percent. However, this is still lower compared to last year, which was at 3.24 percent.
Experts have a lot to say about this including Matthew Speakman, a Zillow economist. He said, “After spiking in early January, mortgage rates have spent the last couple weeks trending consistently lower, as the continued spread of the virus, the introduction of new, more virulent variants, and a thus-far sluggish rollout of the vaccine all injected fresh uncertainty into markets.
“Uncertainty surrounding the latest proposed fiscal relief plan also lowered investors’ expectations for higher bond yields, and thus mortgage rates.”
The chief economist of Realtor.com, Danielle Hale, is also saying that rates should be able to increase in the coming months. Hale said, “Our long-term view for mortgage rates in 2021 is higher, and they seem to be on course to move in that direction over the next 90 days.
“As the economic outlook strengthens, thanks to progress against coronavirus and vaccines plus a dose of stimulus from the government, this pushes up expectations for economic growth and inflation, driving long-term bond rates higher.”
Logan Mohtashami, a HouseWire housing data analyst, also shared the same thoughts. He said, “The COVID-19 crisis was a deflationary event that sent bond yields and mortgage rates lower than they traditionally would have been in a normal recession.
“Mortgage rates have been coming back down while bond yields have been rising since they were never properly priced during this crisis. However, we are getting close to a traditional relationship with bonds and mortgage rates.”
For Mohtashami, what this means is that rising long-term bond yields should also drive the mortgage rates higher this year. “Mortgage rates should rise as we are in the early stages of getting our economy working again. We are early in the vaccination process, and over the next 90 days, that data should get better,” he added.
However, he’s not eliminating the possibility of the rates staying low. This could happen if the pandemic situation gets worse. Any bad news concerning the pandemic could impact the stock market which could then impact the rates. Mohtashami said, “If we don’t execute on getting a vaccine, then mortgage rates could stay around these low levels. Once we get a vaccine distributed and better treatments, the last 10 million Americans who are still unemployed should be able to find work.
“That income, plus the fiscal aid and monetary aid should drive up inflation just a little bit higher, and demand should be higher and growth should be back to normal. [The] slow and steady growth of the U.S. economy will be the primary driver of higher mortgage rates next year.”
“We haven’t had a 10% plus correction in the stock market since March of 2020. A drop in the stock market will provide a rally in bonds, but should only be short term.”
The chief economist of the National Association of Realtors, Lawrence Yun, is also saying that mortgage rates will be stable this year. Yun said, “In 2021, I think rates will be similar or modestly higher, maybe 3%. And so, mortgage rates will continue to be historically favorable.
“The Federal Reserve has indicated they want to pursue this low-interest rate policy for a long period, over the next two or three years,“ he explained.
Overall, the current mortgage rates explain why many people are currently out there in the market, looking for a house to purchase. It’s most likely that they have also heard that rates may rise this year and so they are already on the move. Still, if you’re thinking of purchasing a house through a mortgage, know that you shouldn’t just consider the interest rates. There are other fees that you should take a look at before signing anything.