They have a major impact on how much you are able to borrow and the monthly payment you are expected to make. As such, it is essential to stay informed about current mortgage interest rate trends in order to secure the best deal possible.
There has been much discussion recently about whether or not mortgage loan interest rates are on the rise or decline. According to the Mortgage Bankers Association, the average rate on a fixed-rate 30-year mortgage stands at 4.39%, up from 4.32% in December. This marks the highest level since January 2014, when the average rate was 4.50%. In addition, the 15-year mortgage rate is at 3.46%, compared to 3.36% in December.
In recent months, the Federal Reserve has raised its benchmark rate three times, and this has had an effect on long-term borrowing. As the Fed moves up its rate, banks follow suit and raise their own interest rates. Despite this, mortgage rates are still very low. Compared to a year ago, the 30-year mortgage rate is 19 basis points lower than it was in February 2017, and over that same time frame, the 15-year mortgage rate has seen a decrease of 14 basis points.
These figures are encouraging news for potential buyers. Despite three Fed rate hikes, long-term mortgage rates remain low and relatively unchanged when compared to a year ago. This means that buyers are still able to secure a good deal on a mortgage, without having to worry about rising rates eating too heavily into their budgets.
Going forward, the outlook for interest rates remains uncertain. The Fed will likely continue raising its benchmark rate, and this could cause banks to also begin increasing their own rates. Analysts and economists are divided on what path mortgage loan interest rates will follow in the coming months. Some predict that the current trend of gradually rising rates could continue, while others think that mortgage rates could begin to decline again soon.
Overall, it appears that mortgage loan interest rates have been slowly trending upwards over the past several months due to the Federal Reserve's rate hikes. However, these rates are still low when compared to those of a year ago, meaning that buyers can still find good deals if they shop around. While it is difficult to predict exactly what direction interest rates will take in the coming months, borrowers should remain alert to changes in order to secure the best deal possible.
This article was contributed on Dec 04, 2023