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Will Low Mortgage Rates Continue through 2021?
Dated: February 25 2021
* Article taken from KEEPING CURRENT MATTERS*
With mortgage interest rates hitting record lows so many times recently, some are wondering if we'll see low rates continue throughout 2021, or if they'll start to rise. Recently, Freddie Mac released their quarterly forecast noting;
"The average 30-year fixed-rate mortgage hit a record low over a dozen times in 2020 and the low interest rate enivironment is projected to continue through this year. We expect interest rates to average below 3% through the end of 2021. While this is a modest rise from 2020 averages, the recent vote by the Federal Reserve to keep rates anchored near zero should keep rates low."
Freddie Mac isn't the only authority forecasting low rates with a slight rise. Frannie Mae, The Mortgage Bankers Association (MBA), and the National Association of Realtors ( NAR) also anticipate low rates with a small increase as 2021 continues on.
It's important to note that, while small changes in interest rates can have a substantial impact on monthly mortgage payments, these are still incredibly low compared to where they were just a couple of years ago.
What does this mean for buyers?
Low mortgage rates are creating an outstanding opportunity for current homebuyers to get more for their money while staying within their budget. As the economy gets stronger and we recover from the challenges of 2020, it's natural for rates to potentially rise in response to a healthier economy. Mark Fleming, Chief Economist at First American, reminds us:
"Rising interest rates reduce house-buying power and affordability, but are often a sign of a strong economy, which increases home buyer demand. By any historic standard. today's mortgage rates remain historically low and will continue to boost house-buying power and keep purchase demand robust."
With low rate fueling activity among hopeful buyers, there are a lot of people who are highly motivated and looking for homes to purchase right now. In this environment, it can be challenging to find a home to buy, so a local real estate agent will be key to your success if you're thinking of buying too. Working with a trusted real estate professional to navigate the process while rates are in your favor might be the best move you can make.
If you're ready to buy a home, it may be wise to make your move before mortage rates begin to rise. Let's connect to discuss how today's rates can create more opportunities for you this year.
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