Arizona home buyers were blessed throughout 2020 with super low mortgage rates. Pushing home prices up and Arizona Home inventory lower. Will home mortgage rates go up for 2021?
Freddie Mac is reporting rates hit all-time lows 12 times this year, dipping below 3% for the first time ever while making buying a home more and more attractive as the year progressed (See graph):
What are the mortgage experts thinking about rates? Is it worth waiting for lower rates? Is it worth selling your home, and potentially waiting months and month until you can find a home to purchase?
The Challenge with Waiting for lower rates
The challenge with waiting is that you can potentially, and easily miss this optimal window of time and then end up paying more in the long run. Last week, mortgage rates ticked up slightly. Sam Khater, Chief Economist at Freddie Mac, explains:
“Mortgage rates jumped this week as a result of positive news about a COVID-19 vaccine. Despite this rise, mortgage rates remain about a percentage point below a year ago.”
Experts believe that while rates are still lower in November 2021, than they were one year ago, as the economy continues to get stronger and the pandemic is resolved, there’s a very good chance interest rates will rise again. Several top institutions in the real estate industry are projecting an increase in mortgage rates over the next four quarters (See chart below):
If you’re planning to wait until next year or later, Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), forecasts mortgage rates will begin to steadily rise:
As a buyer, you need to decide if waiting makes financial sense for you.
If you’re planning to buy a home and want to take advantage of today’s low rates, now is the time to do so. Don’t assume they’re going to stay this low forever. If you have to sell first, this becomes tricky. But can be done!