Home buyers have enjoyed low interest rates for nearly a decade. Unfortunately, now they are on the rise. This rise in the interest rates is causing some prospective home buyers to second guess whether purchasing right now is really in their best interest. However, even despite the recent increase, rates remain historically low.
A brief history of mortgage rates
The government-chartered business and industry standard Freddie Mac began recording U.S. mortgage interest rates in 1971, and the average rate since then has been just a little below 8%. That makes today’s interest rate, which recently just tipped above 5%, still a great deal. The highest interest rate recorded was nearly 17% in 1981. While the lowest rate was in January 2021, when rates were at 2.65%.
Why are mortgage rates on the rise?
During the height of the Coronavirus pandemic, the economy suffered severe economic blows. As a result, mortgage rates were pushed down to keep money flowing. Now, the economy has recovered for the most part. And inflation is at a 40-year high. To battle inflation, the Fed has raised rates and will probably continue doing so for the foreseeable future.
Which factors affect your mortgage rate?
Despite the rise in the mortgage rates, you have the power to keep individual rate as low as possible. In general, the better your FICO (credit score) and the more you can put down as a down payment, the lower your interest rate will be. The type of loan you are applying for, the terms of your loan, and the amount you borrow also affect your interest rate.
Now is still the time to buy.
Despite the recent bump in interest rates, now is still a great time to buy a condo, townhome, or single-family house. Many mortgage lenders are allowing lenders to lock in the current interest rate for as much as 30-45 days when they qualify to save money should the rates increase. Also, when the time comes to finally purchase your dream home, Eastland Escrows helps make the process simple with its easy-to-use escrow form which can be printed and returned when you make a contract on the perfect home. Ask your real estate agent about working with Eastland Escrows. We make the process as pain-free and seamless as possible.
About Eastland Escrows in Covina, California
If you’re a real estate agent or broker representing buyers and sellers. Or, if you are considering buying or selling a home, please consider calling Eastland Escrows, Inc. to manage the escrow account. We are an independent escrow company based in Covina, CA serving Southern California since 1973. With more than 100 years of combined experience, we pride ourselves in working like a dog on behalf of all our clients! We have closed thousands of escrow transactions from real estate sales and refinances to business sales and mobile homes.