New data has arrived on the movement of mortgage rates over the last several weeks. While it is true the mortgage rates did see an increase in the month of October, it is not a cause for serious concern. It is helpful to have a complete understanding of where the current mortgage rate lies and what it means when purchasing a home. In this review, we go over recent the recent activity with the average mortgage rate, analyze why it has changed the way it has and use our data to try and determine what mortgage may do in the future.
The Current Mortgage Rate
According to Freddie Mac, the current 30-year fixed mortgage rate sits at 3.64, a relatively low number compared to the mortgage rate over the past decades. A 3.64 mortgage rate indicates the amount of interest the buyer will pay on the home. For example, a home that is purchased at $300,000 with the average 3.64 mortgage rate will require the buyer to pay $10,920 in interest, which is added into the monthly mortgage payment. The higher the mortgage rate, the more interest the homeowner will pay, whereas lower interest rates are far more ideal.
Analyzing Mortage Rate Movement
As mentioned, the current mortgage rate of 3.64 is relatively low when studying the movement over the course of previous years and even decades. However, it is slightly higher than where it was just a month ago. The month of September started at 3.49, and it rose to 3.73 earlier in the month before coming down to the current 3.64 rates. The initial rise to 3.73 scared many, but it should not be considered a cause for concern. Last year at this stage, the rate was 4.72, anything under 4.00 is certainly generous to the buyer.
Predicting Mortgage Rates for November
Trying to predict mortgage rates is incredibly difficult. But there are certain indicators that may give an idea to future movements. Many forecasters predicted rates to rise above 3.85% by the end of the year, and some even suggested a rate above 5.00% was not out of the question. The fact is rates are lower than where they typically are, and mortgage rates typically go back to normal eventually. While there is not much of a threat of a sudden spike in November, it is encouraged to follow through sooner rather than later when purchasing a home as mortgage rates are ideal. In all likelihood, the rates for November will fluctuate, just as it did in October.
The Bottom Line
Now is a great time to buy a home due to the low average mortgage rate for both 30-year fixed mortgages and 15-year fixed mortgages. However, these rates will not stay low forever, and many forecasters believe a rise is inevitable. To secure the low rate, act now and follow through on purchasing your dream home in 2019.
EXIT Realty Bob Lamb & Associates is Murfreesboro’s most innovative real estate team.
EXIT Realty Bob Lamb & Associates
2630 Memorial Blvd, Murfreesboro, TN 37129