The national average 30-year mortgage rate jumped sharply this week. The increase from 4.29% last week to 4.46% this week has an impact on buyers currently in the market for a new home – unless they’ve already locked in at the lower rate. In some cases a quarter percentage point can have an impact on a buyers bottom line, and ultimately reduce their affordability.
Rates are up a full point from May, but down from August when they peaked at 4.6%. The Federal Reserve hinted at slowing its bond purchasing activity, and this resulted in the significant hike in rates this year. Rates are still low by historic standards. But if the economy continues to strengthen, the Fed will again ease up on purchasing bonds. This will once again result in higher longer-term mortgage rates.
Bottom line: for those of you in the market for a new home, hesitation will cost you. As values increase, and mortgages become more expensive, the impact on how much home you can afford will be significant. If its a good time for you to buy, don’t wait.