Mortgage rates have made some unexpected changes over the past 2 years, and experts have certainly been wrong before. While there are interest rate averages, each bank has its own underwriting guidelines, so the interest rate for each bank may vary. Other types of loans saw increases, and interest rates on 15-year fixed-rate mortgages and 5-year adjustable-rate mortgages, for example, exceeded 5%. Interest rates on 30-year fixed-rate mortgages were close to 6% in June, but quickly surpassed 6% last month and stayed there.
Global events, such as the COVID-19 pandemic and Russia's conflict with Ukraine, affect mortgage interest rates. In today's environment, adjustable-rate mortgages may be more affordable than fixed-rate mortgages. With this combination of prolonged home searches and accelerated interest rate increases, it's vital that buyers facing this market keep their previous mortgage approvals up to date. However, it's important to consider waiting until you're financially ready for a mortgage rather than setting a low interest rate before you're truly prepared.
Your creditworthiness, debt-to-income ratio, and down payment are factors that influence the rate your lender will give you for your mortgage. The average mortgage rate for a 30-year fixed mortgage is 7.20%, more than double the 3.22% level at the beginning of the year. While some housing experts say rates may not rise much this year, others say they will rise even higher, pointing to six consecutive weeks of rate hikes through September. The slowdown in real estate activity and rising mortgage rates will slow the rate of growth in home prices, according to the MBA.
If the experts are right and mortgage rates continue to rise throughout the year, you may not find a cheaper time to refinance. Projecting the trend in mortgage rates this month isn't particularly difficult, but it doesn't look like there's going to be any gifts either.
