Coming into this year, most experts projected mortgage rates would gradually increase and end 2022 in the high three-percent range. Here it is – only April, and rates have already blown past those numbers! Freddie Mac announced last week that the 30-year fixed rate mortgage is already at 4.875%. The Chief Economist at realtor.com tweeted on March 31: “Continuing on the recent trajectory, would have mortgage rates hitting 5% within a matter of weeks. Just 5 days later, on April 5, the Mortgage News Daily quoted a rate of 5.02%.
No one knows how swiftly mortgage rates will rise moving forward. However, at least to this point, they haven’t significantly impacted purchase demand. Mortgage rates jumped quicker and higher than even the most agressive forecasts called for at the end of last year, and yet housing demand appears to be holding steady.
Through February, home prices, the number of showings, and the number of homes receiving multiple offers all saw a substantial increase. Much of the spike in mortgage rates occurred in March. We will not know the true impact of the increase in mortgage rates until the March housing numbers become available in early May.
While no one knows exactly where home rates are headed, experts think they’ll continue to rise in the months ahead. In the meantime, if you’re looking to buy a home, know the rising rates do have an impact. As rates rise, it will cost you more when you purchase a house. If you’re ready to buy, it may make sense to do so sooner rather than later.