Mortgage rates jumped above the 3% mark this week, with the average rate for a 30-year mortgage rising to 3.1% annual percentage rate (APR), according to the latest Primary Mortgage Market Survey from Freddie Mac.
"The combination of rising inflation and consumer spending is driving mortgage rates higher," Freddie Mac Chief Economist Sam Khater said. "Shoppers looking to buy a home are fueling strong demand while ongoing inventory shortages are not improving in the presence of higher home prices. This reality illustrates the challenging situation facing the housing market."
If you’re looking to save on your monthly mortgage payment, you can take out a mortgage refinance while rates remain at historic lows. Visit Credible to find the best mortgage rate for you and see how much you could save.
Interest rates expected to continue rising
The average 30-year fixed-rate mortgage increased from 2.98% last week to 3.1% for the week ending Nov. 18. This is also up from 2.72% at the same time last year. The 15-year mortgage also rose to 2.39%, an increase from 2.27% last week and 2.28% last year. The five-year Treasury-indexed hybrid adjustable-rate mortgage decreased slightly to 2.49%, falling from 2.53% last week and 2.85% last year.
And now, economists project that rates will continue to slowly move up as the Federal Reserve continues to taper its economic stimulus.
"The Freddie Mac fixed rate for a 30-year loan pressed upward this week, with a 12 basis point jump to 3.10%," George Ratiu, Realtor.com manager of economic research, said. "Mirrored in the rebound of the 10-year Treasury yield, investors also sent mortgage rates higher following the week’s raft of positive indicators, including strong retail sales, rising homebuilder confidence, and surging industrial production.
"With positive economic indicators complementing the Federal Reserve’s pullback in mortgage-backed securities purchases, I expect to see rates follow a bumpy upward trajectory," Ratiu said.
Homeowners can secure a lower mortgage rate through refinancing and should compare multiple lenders to get the best rate. Visit Credible to find current mortgage rates from multiple lenders in minutes.
How to ensure you get the lowest interest rate
Despite the projected increase, today’s mortgage rates are still historically low. But there are still several things homeowners can do to get a low interest rate loan. Here are a few:
Buy a lower mortgage rate
Average rates are low, but homeowners interested in refinancing can buy even lower rates, known as discount points.
"A mortgage rate buydown is when a borrower pays an additional charge in exchange for a lower interest rate on their mortgage," Rocket Mortgage explains. "Just like lenders can help cover the borrower’s closing costs by charging a slightly higher interest rate, the door swings both ways. Borrowers can essentially buy a lower interest rate upfront."
Compare multiple lenders
After getting an interest rate quote from one mortgage lender, borrowers should shop around with other lenders to see which one has the best rates. Shopping multiple lenders can help borrowers save thousands of dollars over the life of the loan. Visit Credible to compare multiple mortgage lenders at once and choose the best mortgage lender for you.
Work on your credit score
Borrowers with a higher credit score will receive better interest rates for their mortgage loans. Those considering a mortgage refinance should begin to work on improving their credit profile by paying down credit card balances, searching their credit report for errors and paying their debts on time.
If you are interested in reducing your monthly mortgage payment, consider refinancing your loan at a lower rate. Contact Credible to speak to a home loan expert and get all your questions answered.
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