With mortgage interest rates hitting record lows so many times recently, some are wondering if we’ll see low rates continue throughout 2021, or if they’ll start to rise. Recently, Freddie Mac released their quarterly forecast, noting:
“The average 30-year fixed-rate mortgage hit a record low over a dozen times in 2020 and the low interest rate environment is projected to continue through this year. We expect interest rates to average below 3% through the end of 2021. While this is a modest rise from 2020 averages, the recent vote by the Federal Reserve to keep interest rates anchored near zero should keep rates low.”
As shown in the graph below, Freddie Mac is projecting low rates going forward with a modest rise that’s expected to continue through 2022.Freddie Mac isn’t the only authority forecasting low rates with a slight rise. Fannie Mae, The Mortgage Bankers Association (MBA), and the National Association of Realtors (NAR) also anticipate low rates with a small increase as 2021 continues on. Here’s the quarterly breakdown of their projections and how they’re expected to play out over the next year:It’s important to note that, while a small change in interest rates can have a substantial impact on monthly mortgage payments, these rates are still incredibly low compared to where they were just a couple of years ago.
What does this mean for buyers?
Low mortgage rates are creating an outstanding opportunity for current homebuyers to get more for their money while staying within their budget. As the economy gets stronger and we recover from the challenges of 2020, it’s natural for rates to potentially rise in response to a healthier economy. Mark Fleming, Chief Economist at First American, reminds us:
“Rising interest rates reduce house-buying power and affordability, but are often a sign of a strong economy, which increases home buyer demand. By any historic standard, today’s mortgage rates remain historically low and will continue to boost house-buying power and keep purchase demand robust.”
With low rates fueling activity among hopeful buyers, there are a lot of people who are highly motivated and looking for homes to purchase right now. In this environment, it can be challenging to find a home to buy, so a local real estate agent will be key to your success if you’re thinking of buying too. Working with a trusted real estate professional to navigate the process while rates are in your favor might be the best move you can make.
If you’re ready to buy a home, it may be wise to make your move before mortgage rates begin to rise. Let’s connect to discuss how today’s low rates can create more opportunities for you this year.
Starting Your Home Search Is Easy
Starting the home buying process is easy and involves a few simple steps: Download my Home Buyers Guide to learn general information. Search for homes currently on the market to get a feel for the types of homes, locations, and price points available. And of course, please call me, or send me an email / text, to discuss any thoughts about your next home, the buying process, and the most important next step. When in doubt, just call me and I will help you with each step of your journey.
Is Time To Sell Your Home?
Find out how much your home is worth and download my free guide for home sellers for helpful information. It is important to choose a REALTOR® who can develop an effective marketing strategy for your property, negotiate well on your behalf, and has the knowledge to provide an accurate market comparison so you can determine the right asking price. The market changes each week and your asking price is an important component of your selling strategy. I am here to listen and serve, let me know if you want to know how your home stacks up against the competition, or how we can position your property to sell quickly and for a good price, or if you have unique circumstances or goals. Contact me today to start a discussion…
My Denver real estate blog has loads of useful information for home buyers trying to figure out what they want to do…
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