Today’s home mortgage rates are very close to the record lows registered at the end of last year. They have been slowly increasing since then, and there are signs that they will keep increasing. With this in mind, you are probably wondering if you should buy a home now or wait longer. Increasing rates are always bad news for people who wish to become home owners, but mortgage professionals don’t think that rates will rise unexpectedly just yet.
Mortgage rates have been slowly increasing and decreasing since the start of the year, and most analysts don’t think that we will see any major changes in the near future, but they expect a slight increase this year. The recovering economy seems to be slowly growing and there is an increase in job growth, both of these giving confidence to investors and home buyers, so the rates will most likely start going up.
Home Mortgage Rates Today
With current mortgage rates near all-time lows, an increase in home sales and refinances has been recorded this year. The economy, which has the largest influence over mortgage rates, is experiencing more and more growth and, unless a new crisis arises, it will keep growing in the following years. So 2013 might be the last year when mortgage rates will be close to record lows, meaning that acting now might save you money.
Securing a low interest rate on your mortgage means that you will pay less overall for your loan. The current rate for a 30-year fixed-rate mortgage loan is 3.6 percent, while the rate for a 15-year fixed-rate loan is 2.80. Not the lowest they have ever been, but pretty close, and they might not stay in this range in the near future. Rates have been steadily increasing since last November, but are still considered low, so today’s low mortgage rates might be the perfect opportunity for you to become a home owner.
Mortgage Rates Forecast
Like most home buyers, you are probably looking towards the future, and not the past. Low mortgage rates might be a thing of the past, but, according to specialists, they won’t increase significantly and surprisingly in the next months.
The Federal Reserve’s recent actions have kept mortgage rates at a low level. The government has been purchasing mortgages from the lenders, allowing them to lend more money to borrowers, while keeping mortgage rates low. But the government’s help won’t last indefinitely, and the mortgage rates will start to increase more significantly.
The mortgage rates are expected to go above 4 percent by the end of this year, and probably over 4.5 percent by the end of 2014. While this might not seem like a lot, especially for a first time home buyer, the difference will add up over time, and the 1 percent difference in current and future rates will actually mean that you will be paying thousands more on your mortgage loan.
As long as no major events happen in the United States or internationally, like a new war or a major event in the financial world, the mortgage rates will most likely continue their upward trend, at least for the near future. As the economy continues its growth, the mortgage rates will be affected by it, but it looks like it will only be a slow, but steady, increase for the next couple of years.
If you are planning on buying a home, this might be the perfect time to start looking. Not only are the mortgage rates expected to grow, but other costs associated with mortgage loans will experience an increase in the near future. Mortgage rates might still seem fairly low at the expected 4 percent by the end of 2013, but every small increase means more money out of your own pocket, and a more expensive and harder to repay mortgage loan. So, if you think you have done all the research and have a full understanding of what buying a home entails, purchasing a home at today’s mortgage rates is probably a better idea than waiting a few more months or years.