Mortgage Interest Rates Are Still Super Low
Lately, the average mortgage interest rate has been remarkably low. The average rate for a 15-year fixed-rate mortgage fell to 2.2% in January 2021. It’s the lowest it’s been in 30 years. The Federal Reserve is likely to hike interest rates up to around 3.5% for 30-year fixed-rate mortgages in 2022, according to economists.
What Lower Rates Mean For Buyers:
In the tough housing market of today, what’s helping with affordability? Low interest rates. But don’t let that persuade you into buying a house you aren’t ready for. Even if you have a super low interest rate, if it’s on a house you can’t afford it’s a bad deal.
So remember Harnish Real Estate’s advice on monthly payment limit, down payment amount and mortgage type:
Limit your house payment to no more than 25% of your monthly take-home pay.
Save at least 10–20% for a down payment.
Choose a 15-year fixed-rate conventional mortgage.
What Lower Rates Mean For Sellers:
If interest rates stay low, buyers will be more to quickly buy your home, but if interest rates start to increase, then expect your house to be on the market longer.