Mortgage Rates: A Lesson From History
As we've mentioned a few times in recent blogs, right now is a great time to be locking in a mortgage rate, as we're currently seeing the lowest rates for over a year. Last month's average rate of 4.14% on 30-year fixed rate mortgages was the lowest since the very beginning of 2018!
In actual fact, rates have been extremely low, on an historic scale, for many years now. So while we might talk about moments when they rise a bit, it really does help to put current rates in some sort of historic context.
Freddie Mac produces a very interesting and useful table that maps the progress of average 30 year fixed rates since 1971.
If we go back in five year increments, we can begin to see how competitive today's rates are:
April 2014 - 4.34%
April 2009 - 4.81%
April 2004 - 5.83%
April 1999 - 6.92%
April 1994 - 8.32%
April 1989 - 11.05%
April 1984 - 13.65%
April 1979 - 10.50%
April 1974 - 8.58%
The highest ever figure since 1971 was October 1981 when the average rate was a staggering 18.45%!!!
While we always, quite correctly, wish for lower rates, it's undeniable that right now is one of the best ever times to obtain a home loan. The current low levels of fixed rates can only have very positive outcomes for those who buy now.
If you've been renting, you might want to consider that it's almost certain rents will continue to rise exponentially. Buying a home with a mortgage means that you'll have reliable and fixed costs for the life of the home loan, without ever having to worry about what future rental prices might escalate to.
We'd be happy to introduce you to the best home finance professionals in the Coronado area, who can explore the possibilities with you, so don't hesitate to reach out to us on 619-886-0175.