November 30, 2021 marks the current peak of interest rates due to recent economic and pandemic-related uncertainty. Since January 2021, the average rate for a 30-year fixed-rate mortgage has increased from 2.92 percent to a current 3.17 percent as of today.
At this current time, it is still possible to take advantage of mortgage and refinance rates before they potentially start to rise again. Those looking to take out a mortgage or refinance their existing mortgages can do so now with relative confidence.
In general, the current interest rates are quite favorable for those looking to secure a home loan. The current higher range of interest rates also gives borrowers significant power when seeking to negotiate since lenders may be looking to bolster their own portfolios in this uncertain climate.
But what makes the current interest rates so favorable?
The reason for these low interest rates can be attributed to the Federal Reserve's commitment to keep the federal funds rate controlled. When the federal funds rate is low, it generally indicates that borrowing costs will be cheap for those applying for mortgages. The Federal Reserve also has enacted other policy measures such as the expansion of the Quantitative Easing program which injects more liquidity into the market, thus helping to further bring down the cost of borrowing.
The pandemic has also played a major role in bringing down mortgage and refinance rates. The economic downturn has caused an increase in the amount of savings that many have, allowing them to pay down debt and make larger down payments on homes. This increased ability to pay down debt has led to lower demand for mortgages while the expanded QE program has helped to keep interest rates low and stable.
For those looking to take advantage of these current mortgage and refinance rates, the process can be overwhelming. It can be difficult to determine if one should lock in a fixed or adjustable rate, decide if now is the optimal time to refinance, or understand how much closing costs might be involved. To help answer these questions and handle the process, it is important to speak to a qualified loan officer or advisor who can walk through all the necessary options.
The current mortgage and refinance market is prime for those looking to take advantage of low interest rates. While there is potential for higher rates in the future, there is still opportunity to take advantage of today's rates before the market changes direction. Those looking to take on a mortgage or refinance their existing home loans can rest easy knowing that it is still a good time to do so.
Analysis:
The current mortgage and refinance market is providing an excellent opportunity for those looking to take advantage of low interest rates. This is due to the Federal Reserve's commitment to keeping the federal funds rate controlled as well as the creation of multiple policy measures, such as the expansion of the Quantitative Easing program, which are designed to inject more liquidity into the market. The current peak of interest rates recorded on November 30, 2021 is 3.17 percent for a 30-year fixed-rate mortgage, a substantial increase from January 2021 when the average rate was only 2.92 percent.
Those who are interested in taking out a mortgage or refinancing their existing mortgage should speak to a qualified loan officer or advisor to go through all the necessary options. Potential borrowers should also consider any closing costs that may be associated with their new loan. The current market environment presents a unique opportunity for people to take advantage of the low rates before they start to rise again in the future.
This article was contributed on Sep 21, 2023
