Interest Rates: Is Now a Good Time to Build?
Buying a home is always a stressful time, full of anticipation, excitement, and fear. With interest rates increasing in the last year, it can add a new layer of stress to the whole process. However, buying or building a home now is not only feasible, but still a great investment! Did you know that in 1981 interest rates peaked at 16.63%? They have been steadily declining over the decades to the average 3-5%, and the current rate is around 5.45%.
Interest rates are often directly tied to inflation rates and with the federal government currently trying to decrease inflation, that will have a direct impact on the current interest rates. Many economists agree that inflation has reached its peak which is good news for not only our wallets but interest rates! The Covid-19 pandemic brought rates back on the rise, but the market has a long history of rate spikes and the one we are currently experiencing is sure to go back down soon. Interest rates can be analyzed over and over but when you really sit down and look at the trends over the last decade you can see that they are not increasing any more rapidly than other times of economic insecurity. Only a few short years ago 5% was considered a "good" rate.
You might be quoted an interest rate one day and it could change the very the next day. Most economic experts will caution you against holding out to wait for a better rate. That being said, if you see a rate that you like, move forward with locking it in. Always make sure to get quotes from different lenders to ensure you are receiving the best deal.
We want you to feel confident in your new home and we understand that the current market can make the whole process seem overwhelming. However, McKay Vassar Custom Builders will be with you every step of the way to ensure that you get your dream home with as much ease as possible.
Sources:
Ceizyk, Denny. "Historical Mortgage Rates: Averages and Trends from the 1970s to 2022." ValuePenguin, ValuePenguin, 25 May 2022, https://www.valuepenguin.com/mortgages/historical-mortgage-rates.
"Historical Mortgage Rates | Nextadvisor with Time." Time, Time, 29 July 2022, https://time.com/nextadvisor/mortgages/mortgage-rates-history/.
"Interest Rate Statistics." U.S. Department of the Treasury, 3 Mar. 2022, https://home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics.
About the author: Holden Lewis is NerdWallet's authority on mortgages and real estate. He has reported on mortgages since 2001. "Today's Mortgage Rates, Thu., Aug 4: Mixed." NerdWallet, https://www.nerdwallet.com/article/mortgages/mortgage-interest-rates-forecast.