For instance, 30-year fixed-rate mortgage (FRM) was reported at an average of 4.03 percent, up from an average of 3.57 right after the election.
Understanding the movement of Mortgage Interest Rates
The market is rallying with historical optimism in anticipation of a growing economy. To this end, it is the state of the 10 year treasury rate, (not the fed rate), that drives mortgage rates.
According to Sean Becketti, chief economist, Freddie Mac. “In a short week leading up to the Thanksgiving holiday, the 10-year Treasury yield rose 8 basis points. The 30-year mortgage rate followed suit, rising 9 basis points to 4.03 percent. This increase marks the first week since 2015 that mortgage rates have risen above 4 percent.”
With the current market surge, we could see continued rise in mortgage rates.
Freddie Mac Survey Results
How does this affect home buying?
Consider taking advantage of the low interest rate environment for a new home purchase or to refinance your current mortgage. As rates increase, buying power is reduced.
Additionally, inventories are low, which tend to drive home prices up with multiple bidders for the same property.
Holiday season aside, with precedent-setting optimism being demonstrated by the market, right now may be the time to make your move to obtain the lowest possible mortgage rates.
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About the Author
Thomas DeFazio is a full-time Realtor® at Christ Smith Realty in Spring Lake, New Jersey serving Monmouth and Ocean Counties. Let’s connect on LinkedIn and expand both our networks! Feel free to send me an invite here. You may also like to subscribe to my free newsletter to get the latest in real estate insights direct to your inbox.