Low interest rates have been one of the driving forces behind the amount of buyers we are seeing in the real estate market right now. In the past year we have witnessed rates reach record lows numerous times, but how long will it last?
Freddie Mac has recently released their quarterly forecast which states:
“The average 30-year fixed-rate mortgage hit a record low over a dozen times in 2020 and the low interest rate environment 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 interest rates anchored near zero should keep rates low.”
Along with Freddie Mac, Frannie Mae, The Mortgage Bankers Association, and the National Association of Realtors are also anticipates low rates will continue with a small increase throughout 2021.
What does this mean for buyers?
With mortgage rates remaining at or near record lows, buyers have been able to get more for their money while staying within their budget. Some buyers have also benefited from extra discretionary money as they have remained close to home throughout the pandemic. As the economy gets stronger, we can anticipate rates will rise. 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.”
In the current environment, it can be challenging to find a home to buy, as low interest rates have been paired with low inventory. This has caused an increase in the amount of bidding wars resulting in low days on market and over-asking sales prices.
In summary, if you’re ready to buy a home, it may be wise to make your move before mortgage rates begin to rise. And if you’re looking to sell, now is the time to capitalize on the amount of buyers ready to make a purchase!
As always, Arrive Real Estate Group is committed to helping our clients achieve their current and future real estate goals. We welcome you to contact us with any questions or to request an evaluation of your home.