Mortgages are a section of the financial market that hits close to home for many of us. For quite some time now, mortgage interest rates have been hitting record lows, leading to a surge in mortgage activity by giving homebuyers a big boost. The most popular mortgage product in the U.S, the average 30-year fixed-rate mortgage hit all-time lows more than 12 times in 2020.
This trend brought a steady decline in borrowing costs making home buying and home refinancing more attractive as the year progressed. It's safe to say that mortgage rates fell off the table in 2020 and continued with the decline in the last quarter of 2020 as rates tumbled even further.
It's worth noting that the start of January saw 30-year mortgage rates hit a 50-year low. With news about mortgage rates hitting record lows streaming in repeatedly, many are asking themselves, will interest rates remain low? Where will the rates go in 2021? We gathered input from a variety of analysts and industry forecasters, read on to be in the know.
First off, this is a hot topic, and no one has a crystal ball into future lending. Whereas there's no way to predict such things with complete accuracy, the consensus among industry analysts and authorities is that mortgage rates will remain low for the foreseeable future.
However, the rates are expected to inch upwards as the pandemic gets resolved and the economy rebounds. This rise will be enough to discourage refinancing but low enough to make home buying attractive.
According to Bankrate.com, interest rates will remain low in 2021 to help stimulate an economic recovery partly due to the Federal Reserve's stimulus measures, such as the decision to keep interest rates anchored near zero.
Freddie Mac's research team forecasts that going forward, mortgage rates will remain low, with a modest rise expected to continue through 2021 and 2022. Freddie Mac forecasts that many of the trends shaping home buying last year will continue. The low mortgage interest rate environment, strong demand for housing, and moderate growth in house prices. The researchers caution that the effect of the modest rise in mortgage rates will reflect in the house-buying power of hopeful buyers.
The Mortgage Bankers Association (MBA) and National Association of Realtors (NAR) expect the housing market to stay the course as historically low mortgage rates drive housing activity in 2021. Though the rates will remain inarguably low, MBA's highly regarded economists note that the uptick in rates could be the start of a sustained upward trend.
The housing market is expected to do very well this year. As a home buyer, 2021 brings a host of new questions. Is now a good time to take out a 30-year fixed-rate loan? Should you buy that home now? The short answer is yes. There is more incentive than ever for buyers to make a move now.
Since there is no telling when exactly mortgage rates will start rising, take advantage of the low mortgage rates now. The challenge with waiting is that you could end up paying more for a house later on in 2021 if you miss this optimal window of time.
There you have them; the reasons why now is a great time to buy a home. If you're in the market because of a home, take advantage of historically low-interest rates and avoid higher home prices.
Planning to wait until later? Don't assume mortgage rates are going to stay this low forever. The days of mortgage rates setting one all-time low after another are numbered. Now is the time to find the right rate for your home mortgage or refinance your existing home. If you're ready to buy a home, make your move before mortgage rates begin to rise. To discuss how today's low rates can create more opportunities for you this year, contact us today.
We are a direct lender and a broker who will work one on one with you to exceed your expectations. If we don’t have a product that makes the most sense for you, we’ll find the lender that does. We’ll make sure you have the best loan at the best price. Choose Lend Smart- it’s the smarter way of doing business.