Mortgage Rates Go Up, but Don’t Give in to Pressure to Lock the Rate
Mortgage rates are still pretty low, but they have jumped significantly in the last couple of weeks. If you’re buying a home, it might be time to lock in a low rate, but don’t let that force you to buy.
After the election, rates rose to 3.94% from 3.57%, according to CNN. According to their own analysis, Bankrate has a slightly higher number at 4.01 percent. They say the rate was 4.09 a year ago, and usually rates don’t jump that fast. Many professionals recommend fixing your interest rate as soon as possible, but keep in mind that most of these people are mortgage lenders, brokers, or other people from the lending industry. This does not mean that they are wrong. The rates are historically low, no matter what, so the blocking probably won’t hurt right now.
However, if you are not ready to buy a home, you also should not let that pressure you into making a decision that you are not sure about. Realtor.com reports :
While rates may continue to rise, they are not expected to continue to rise.
“We expect rate hikes next year,” says Jonathan Smoke, chief economist at realtor.com®. But he adds, “I doubt we’ll see more growth before the end of the year.”
And Zillow VP Erin Lanz told the Chicago Tribune :
“Consumers considering buying or refinancing now should be patient as we are likely to see rates stabilizing when the markets find a new equilibrium.”
Even if we see movement, buying a home is a big decision. A good low rate is tempting, but you have to make sure you have enough time to factor in the many additional financial factors .
If you come across advice urging you to set a low bid, think about the source, take your time, and don’t feel pressured to commit to a purchase you’re not ready to make.
Photo by Benjamin Mellish