Mortgage Rate Trends - What's Next?

Recent weeks have seen further rises in mortgage rates and, naturally, this is a key focus for home buyers and sellers.

Real estate is driven by supply and demand. Demand is largely driven by buyers' ability to borrow money. As interest rates go up the demand side of real estate is affected as every 1 % increase in interest rates equals a 10% increase in mortgage payment.

Understandably, what everyone wants to know is what happens next to mortgage rates?

No one has a crystal ball, however being that we just hit the 2% inflation number there is a very high level of probability that rates will continue to rise.

What we can say with absolute certainty, however, is that rates are still extremely competitive from an historic perspective.

Consider these figures, provided by Freddie Mac, showing where 30 year fixed rates were in October 10, 15, 20, 25 and 30 years ago:

October 2008 - 6.20%
October 2003 - 5.95%
October 1998 - 6.71%
October 1993 - 6.83%
October 1988 - 10.30%

As you can see, rates are still very competitive when we look back in time, so there is a strong argument to not delay your purchase or sale, with buyer demand still very high (not least because of the strong economy and jobs confidence).

Please don't hesitate to reach out to us to discuss the possibilities of a still very vibrant market.