Why Current Mortgage Rates Are Still Great Value!

If you're looking for a home, it won't have escaped your attention that mortgage rates have been climbing for some time now. Indeed we recently saw the highest 30 year rates for seven years.

Of course we've become more accustomed to seeing rates travel in the opposite direction over recent years but, as I have often said in these communications, that situation was unsustainable in the long term and, as the economy improves, it's much more likely that we'll see higher rates.

Because we've become used to such low rates, it's important at this time to consider just how low they still are.

The best way to appreciate this is to go back in history and look at how high 30 year fixed rates have been:

May 1978: 9.57% (40 years ago this month)

October 1981: 18.45% (highest 1971 - present day)

May 1988: 10.46% (30 years ago this month)

May 1998: 7.14% (20 years ago this month)

May 2008: 6.04% (10 years ago this month)

(Source: freddiemac.com - "Monthly Average Commitment Rate And Points On 30-Year Fixed-Rate Mortgages Since 1971")

On any historic scale, mortgage rates are still extremely low, which is very much reflected in the fact that buyer enthusiasm remains extremely strong.

I hope this quick look back in time helps to reinforce your confidence that now is still a great time to buy or sell a home.

As ever, please don't hesitate to contact us today if you have any questions.