Mortgage rates have been rising since the start of the year. When will buyers say they've had it?
Mortgage rates have been rising since the beginning of 2022, and they've risen even more substantially over the past month.
Here's a summary of mortgage rates for April 13:
|Today's Interest Rate
|30-year fixed mortgage
|20-year fixed mortgage
|15-year fixed mortgage
30-year mortgage rates
The average 30-year mortgage rate today is 5.131%, up from 5.092% yesterday. At this pace, the 30-year mortgage could hit 6% this year,
20-year mortgage rates
The average 20-year mortgage rate today is 4.753%, up from 4.657% yesterday. At this pace, the 20-year loan could reach 5% this year.
15-year mortgage rates
The average 15-year mortgage rate today is 4.213%%, up from 4.165% yesterday. The 15-year loan could reach 4.5% this year based on its current pace.
The average 5/1 ARM rate is 3.983%, down from 4.011% yesterday. A 5/1 ARM may seem like an appealing borrowing option right now due to the initial savings involved. But those who sign a 5/1 ARM run the risk of their monthly payments rising over time.
Will rising rates cause a drop in home buyer interest?
Today's housing market is glaringly unfriendly to buyers. Not only is inventory extremely limited, but home prices are through the roof. Throw in rising mortgage rates, and it's easy to make the argument that now is just plain a terrible time to buy.
If mortgage rates keep rising, buyers might draw that very conclusion. And interestingly enough, that could help cool the red-hot housing market off.
If climbing rates push buyers out of the market and demand for homes declines to a notable degree, it should result in a drop in home prices -- even if it's a gradual one. As such, while rising mortgage rates aren't a good thing per se, they may at least have one positive side effect -- spurring a widespread buyer pullback that sends home prices down to more moderate levels.
Of course, some buyers might choose to move forward with plans to purchase a home despite rising rates. Those who do are advised to shop around with different mortgage lenders to see what offers they're eligible for. It may be that one lender is more competitive than another, and at a time when borrowing has gotten expensive, that's an important thing.
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