Inflation has been rising at a record pace. Many factors influence mortgage rates, such as inflation, global events, economic crises, personal factors, the Federal Reserve, and even bond prices. Even though mortgage interest rates rise, they will continue to be lower than historic mortgage rates. If you're a borrower, you can mostly expect a lot of the same more expensive financing this month.
Inflation continues to affect the economy: price increases in August remained at a 40-year high, forcing the Federal Reserve to maintain its own pressure on rates. With five increases under its belt so far this year, the central bank is about to raise rates again in November and December. In today's environment, adjustable-rate mortgages may be more affordable than fixed-rate mortgages. You'll be able to see a true side-by-side comparison of your potential monthly mortgage payment and how closing costs, lender fees and interest rates are reflected over time with each loan offer.
Mortgage interest rates also depend on lenders looking at your personal finances and other personal factors, such as the amount you plan to borrow, the repayment period, employment status and income, the debt-to-income ratio, and your credit rating. Here's what housing experts say about October's 30-year fixed mortgage rate trends and what you can do.
Mortgage rateshave made some unexpected changes over the past 2 years, and experts have certainly been wrong before. Look for the lowest rate, but also pay attention to your annual percentage rate (APR), the estimated closing costs, and the additional “discount points” fees that are charged upfront to lower your rate.
If the experts are right and mortgage rates continue to rise throughout the year, you may not find a cheaper time to refinance. Getting a home loan with a slightly lower rate could save you hundreds or thousands of dollars over the life of the mortgage. So how should homebuyers approach a housing market with stagnant home prices, but with interest rates at 15-year highs? Select spoke to two experts about the latest interest rate hike and how consumers, especially homebuyers, should think about it. 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.
If you're buying a home, the right time to set a rate is after you've secured a purchase agreement and looked for your best mortgage offer. 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. The Federal Reserve began raising its benchmark interest rate in March and then, in June, raised it 75 basis points, the biggest increase since 1994, only to repeat that step again in July and September. Mortgage experts predict that rates will rise even higher in October, albeit at a slower pace than we've seen in recent months.