Lot Size6,970 sqft
Home Size1,812 sqft
Days on Market34
Learn More About Mortgage Rates
- Real Estate Tips
- August 1, 2023
What are the Mortgage Rates Today?
Inflation has greatly increased the cost of living across the country. Unfortunately, the rise of inflation has also affected mortgage rates. As of June 2023, the 30-year fixed mortgage rate average is around 7.26%, and the average rate for a 15-year fixed mortgage is now at 6.55%. This has caused the housing market to slow down exponentially, and many Americans are compiling about the unaffordability of the housing market. It’s true that these conditions may not be ideal for most buyers, but it is important to weigh the pros and cons of purchasing a home in these conditions. Keep reading to learn more about mortgage rates today in America!
What are the Mortgage Rate Trends?
The mortgage rate trends in America are influenced by various factors such as economic conditions, inflation rates, and monetary policy. Over the past decade, mortgage rates in America have experienced significant fluctuations. Between 1997 and 2008, mortgage payments as a proportion of income increased due to a large increase in mortgage debt. This upward trend in mortgage payments was primarily driven by the rise in interest rates during that period. While mortgage rates were substantially low in 2020 and 2021, they did not stay this way forever. This historic change in interest rates caused the housing market to BOOM. Houses couldn’t stay on the market and were being purchased for well above asking.
Now, the Federal Reserve is hiking up interest rates, hurting many Americans that are trying to purchase a home right now. This trend in rising mortgage rates is a result of several factors. Firstly, the Federal Reserve sees potential inflation risks and is taking measures to prevent overheating of the economy. Secondly, as the economy recovers from the impact of the COVID-19 pandemic, demand for housing has surged, resulting in increased competition among homebuyers and affecting prices. Additionally, the supply chain disruptions and shortage of construction materials have contributed to higher construction costs, which can further impact mortgage rates.
Should I Choose a 15-year or a 30- Year Mortgage?
When deciding between a 15-year or a 30-year mortgage, there are several factors to consider. These factors include your financial situation, long-term goals, and risk tolerance. If you have financial stability and can comfortably afford higher monthly payments, a 15-year mortgage can be a great option. A 15-year mortgage typically comes with a lower interest rate compared to a 30-year mortgage, which means you’ll pay less interest over the life of the loan and pay off your mortgage faster. However, the higher monthly payments can strain your budget and limit your flexibility in case of unforeseen circumstances. On the other hand, a 30-year mortgage offers lower monthly payments, providing more flexibility and room in your budget for other expenses.
Am I Ready to Purchase a Home?
If you are ready to purchase a home, your first step should be to consult with a Realtor and begin exploring the inventory in your area. Consider doing some research and budgeting before you decide to purchase a home in today’s market conditions!