If you’re planning to buy, sell, or refinance, then you may be nervous and wondering what the mortgage rate increase will mean for you.
Before we dive into that, let’s take a quick look at the history of interest rates for some perspective.
1970s: Started in the mid 7% range and ended around 11.20%
1980s: Early on it increased to 16.63% and ended around 10%
1990s: Started around 10 % and fell to just below 7% in 1998.
2000s: Started around 8%. 2003 in the upper 5%. (Housing crash) 2009 – 5.04%.
2010s: Started at 4.69%. Fell to mid-3% and ended up as high as 5.34%. 2019 – declined
2020 started at 3.7% and ended around 2.68%
2021 increased to 3.09%
2022 5% and rising.
While rates are rising, they are not the highest they’ve ever been, but the current rate increase does mean changes for everyone.
Your house may not move as fast: With less people qualifying or qualifying for less, buyers may not be able to afford your home, or they may be pickier given the change in market value. Where sellers were getting offers above the asking price, there may be less competition.
For Homeowners who want to refinance:
Depending on your current home loan rates, don’t rule out refinancing just because the rates have increased. This especially true if you have significant equity to which you need access. Using your home equity to pay off debts with higher interest rates can still be the right move.
The housing market is facing a number of economic influences with inflation, supply chain issues, and the impact of global conflict. Still, the current mortgage rate increase can’t compare with some of our historical highs. Don’t get discouraged. Call a mortgage broker who will work with you personally to find the home loan and refinance option that’s best for you.