I told you this would happen. Sure enough, mortgage rates are back above 3 percent for the first time since last summer.
And, rates will keep moving higher.
That’s because the economy is finally starting to do a bit better. And, it will continue to do better given the increased distribution of the Covid-19 vaccine throughout America.
Couple that will states willingness to reopen their economies 100% (Florida, Texas, Connecticut, Mississippi, etc) and all of a sudden, we are seeing a return to a better economic environment.
Which means: money need not be so cheap in the future. Indeed, rates on ten year treasuries are inching higher, and given that banks base their mortgage loan rates off the ten year, sure enough, mortgage rates are moving higher too.
Soon, Americans will have some extra cash in their pockets thanks to Biden’s massive stimulus plan and, it’s not impossible that interest rates will skyrocket as inflation seeps into the economy.
If you’re looking to buy a home or refinance, locking in a mortgage rate now is a smart idea. Meanwhile, my advice is to also be realistic about how higher rates will effect the housing market. Real estate has been on fire, but that’s in part thanks to extraordinarily low interest rates. Once rates tick up, people will not be able to afford as much home. This, in turn, could negatively effect some home markets.
Nonetheless, we’re not there yet. But, do watch these rates – and lock in while you still can.