If you are discussing a spring home purchase or deciding to refinance your home in the Triangle area, now may be the time to lock in your mortgage rate.
This is because the average mortgage rate fell this week after rising for most of February 2022, according to Freddie Mac’s Primary Mortgage Market®.
Nationally, the average interest rate on a 30-year fixed mortgage fell to 3.76%, down 0.13% from last week, although it is still almost three-quarters higher than at the time last year. year.
Average interest rates on a 15-year fixed mortgage also fell 0.13% from last week and were found to be 3.01% at the time of the survey’s publication today.
WRAL TechWire also announced today new data from ATTOM Data Solutions, which shows that there are more than twice as many homeowners in Triangle who have chosen to refinance an existing mortgage than those who have initiated a new mortgage to buy a new home. in the period after the onset of the global coronavirus pandemic until the end of last year.
Since the beginning of the pandemic, 2 times more refinancing than new housing loans in the Triangle
What is happening?
According to Freddie Mack, global geopolitical tensions have led many investors to move capital to “bond security, leading to a drop in mortgage interest rates.”
“As long as inflationary pressures remain, the cascading effects of the war in Ukraine have created market uncertainty,” Freddie Mac said in a statement. “Interest rates are therefore expected to remain low in the short term, but are likely to increase in the coming months.”
Interest rates are expected to rise as the Federal Reserve raises interest rates, which may come soon. A Federal Reserve manager noted last week that interest rates could be halved, although many expect a quarter-point increase to be considered.
Is a recession coming? Odds are rising as the Fed seeks to raise interest rates
Now may be the time to “lock up”
Meanwhile, average house prices continue to rise in the triangle. Data obtained from WRAL TechWire from the Triangle Multiple Listing Service database show that the average residential property price increased slightly in February 2022 compared to January 2022 and is now $ 435,000.
As prices rise, the affordability of housing decreases for some potential home buyers. Economists at the national real estate brokerage firm Redfin have found that raising interest rates from 3.55% to 3.9% would cause a potential home buyer to lose $ 13,750 in purchasing power – at a time when housing value is rising.
And although homes that are considered affordable are coming to market at an increasing rate, demand for these homes remains incredibly high, as this viral video from last month shows.
“Interest rates are rising, people usually think about the monthly payment in terms of how much they actually pay,” said Nicole Basho, an economist at Zillow, in an interview with WRAL TechWire last month. That could be hundreds of dollars a month, and that could change an individual’s ability to buy or live in a home, Basho said.
But on the other hand, when interest rates fall, refinancing to a lower rate can provide homeowners with savings of hundreds of dollars in a monthly budget. So now may be a good time to “lock up” an interest rate with a mortgage lender or mortgage broker, as interest rates may change again soon.
Economists find that Raleigh homes will become even less affordable