Rising Mortgage Rates: What to Know
After steadily falling over the winter, mortgage rates have started to rise in recent weeks. Some potential homebuyers are concerned that these higher rates along with higher prices are making homes less affordable. If you’re planning to purchase a home this year, you too may be wondering if now’s the right time to buy or if you should hold off on your search until rates come back down.
The recent uptick in rates has been driven by what’s happening with inflation. Joel Kan, Vice President and Deputy Chief Economist at the Mortgage Bankers Association (MBA), explains:
“Mortgage rates increased across the board last week, pushed higher by market expectations that inflation will persist, thus requiring the Federal Reserve to keep monetary policy restrictive for a longer time.”
The most recent weekly average 30-year fixed mortgage rate reported by Freddie Mac is 6.5%. It’s the third week in a row that rates have increased and puts them at the highest point they’ve been this year (see graph below):
Advice for Home Shoppers
Pausing your home search because rates have started to go up again, may not be the best decision for you. This could, instead, be an opportunity to buy the home you’ve been searching for. According to the MBA, mortgage applications declined by 13.3% in just one week, meaning you could face less competition among other buyers when you’re looking for a home. This is a welcomed relief to the Kansas City housing market which still has a low home inventory.
Over the last few weeks, mortgage rates have risen. However, this doesn’t mean you should delay your plans to buy a home. The decrease in competition from other buyers could be an advantage. If you need help deciding what is best for you, connect with the Just Say Home KC Team by calling 816-656-2816.