What to know as fixed-loan rates start to tick upward again
Mortgage interest rates played an enticing game of “how low can you go” limbo late last year, with fixed-rate 30-year mortgages averaging a historic low of 4.17 percent the week of November 11. But they’ve since crept up, recently eclipsing 5 percent, according to the most recent weekly national survey on Bankrate.com at the time of this writing.
The rise in rates can be attributed primarily to increasing expectations for future economic growth, with the trend in most economic indicators over the last few months generally showing improvement, says Frances Katzen, an agent with Prudential Douglas Elliman in New York.
Despite the recent rise in rates, it’s important to keep in mind that they still remain near historically low levels. Which begs the question: Should buyers or refinancers lock in now or wait for rates to dip even lower?
Depending on your situation, it may not be a good idea to “time” the market and hold out hopes that rates will drop again.
“It’s always difficult to predict where rates are going and how quickly they will move. But it is a very good time to lock in a fixed interest rate if this is the program that is right for you,” says Paul Anastos of Mortgage Master Inc., Walpole, Mass.-based lender. “If you are refinancing and in a situation where you can save $75 to $200 in monthly payments, it doesn’t make a lot of sense to wait for another .125 percent movement in rates to save another $5 to $20 a month.”
Although few can agree on which direction mortgage interest rates will trend over the coming months, some see rates holding steady.
“Rates will remain low as long as unemployment remains low,” says, like Steven Alexander, president of Private Mortgage Services in Atlanta.