Should you cancel if you were looking for the best home refinance rates and worried that the rates are rising? For about two years, we have been enjoying low mortgage rates, but when 2022 came, the rates began rising even higher than how it was before the pandemic happened.
When buying a home, yes, the rates matter, but there are other factors that you should consider. Not counting the pandemic rates, historically, the current rate of under 6% is still within the fixed rates we have been accustomed to. With the rates in mind, it might be good to take a second look at your desire to purchase a house and consider pushing through with your plans.
Why are home refinance rates rising?
The average 15-year and 30-year fixed rates have not reached the 6% threshold—the 30-year fixed-rate mortgage averages at 5.83% and 5.06% for the 15-year fixed mortgage. If you look at the 5/1 adjustable mortgage, it is at 4.29%.
What are these numbers telling us? High inflation is one of the primary reasons why we have arrived at these increasing mortgage rates. The May inflation reached its highest in 40 years at 8.6%! Aside from the high inflation rate, the COVID pandemic also added to the increase. The world is also reeling from Russia’s invasion of Ukraine. These combined scenarios caused the world markets to experience uncertainties leading to market volatility.
Should you buy a house now?
Taking these factors in, is it a good time to buy a house? As mentioned earlier, yes, there are a lot of uncertainties in the global market. However, mortgage rates have remained at favorable levels, and experts still consider them within the normal levels.
Another factor leading to the rising rates is the reality that there’s a lot of demand for houses, but the supply is insufficient. Even before the pandemic happened, prices rose because of the great demand but less supply. Experts say that given these realities, it is still a good time to invest and consider buying the house that fits your needs, budget, and lifestyle.
Shopping around and comparing rates is the best way to get home refinance rates. Rates have been rising, and a difference of 0.06% can be significant in the long run. Should the difference stop you? If there is a need, consider investing now.