Will Rates Return to Recent Lows?

30-year fixed mortgages in 2012 were historically low.  Freddie Mac believes it is unlikely for them to return to recent lows.

If rates were to head back under 4%, that would, of course, be fantastic news for any prospective home buyer (or home owner who put off re-financing their current mortgage.)  

Unfortunately, mortgage interest rates are expected to rise this year, as we have recently written about.  

It is likely, in fact, that rates will look more like the greater than 6% rate of last decade rather than the less than 3.5% rate in 2012.

Note, however, that the current low is extremely low compared to historic averages, according to Freddie Mac:

The all-time record low – since Freddie Mac began tracking mortgage rates in 1971 – was 3.31% in November 2012. Conversely, the all-time record high occurred in October of 1981, hitting 18.63%. That's more than four times higher than today's average 30-year fixed rate of 4.32% as of March 20...rates hovering around 4.5% may be high relative to last year, but something to celebrate compared to almost any year since 1971.

With this knowledge, now looks like the optimum time for buyers to go into the market before the rates do rise above the current low they are experiencing.  In fact, buying in spring is preferred to Summer as the market is less active, and sellers are more likely to entertain your offers.

Looking to start your house hunting experience?  Don't hesitate to send us an email or give us a call.  The Real Group Real Estate team will be happy to help.

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Chicago, IL 60614

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