Are mortgage rates high right now?
Forty years ago, in October of 1981, the average mortgage rates were above 18%. A year ago, mortgage rates on 30-year mortgages were below 3%. Are rates higher than last year? Yes, the rates are higher. Are they even close to historic highs? Not a chance.
Mortgage Rates Today
Mortgage applications have decreased by 14.2%, according to the Mortgage Bankers Association. This pullback in applications represents the lowest mortgage activity since 1997.
The rare for a 30-year fixed rate mortgage hit 6.765 % for the week ending September 30, 2022. That rate is the highest interest rate since 2006.
Why are Mortgage Interest Rates Rising?
Inflation is at its highest point in 40 years. A major factor in that inflation has been the rapid rise in home prices. According to the National Association of Realtors, 70% of the real estate markets in the United States have shown double-digit price appreciation since 2021. To counteract rising inflation, the Federal Reserve Bank has been increasing interest rates in general. While this does not dictate what companies have to charge for mortgage interest rates, it influences them.
Is now a good time to get a Mortgage?
Now is a fine time to get a mortgage. If you believe that is the long-range mortgage interest rate will go down. It makes sense to buy now because the prices of homes will probably go up, so you can lock in the lower price now and refinance to a lower mortgage rate. Alternatively, if you believe that mortgage rates will go up in the future, then it is a no-brainer to lock in the lower rates now.