If you’re purchasing a home, mortgage rates are one of the numerous factors that influence how much you can afford. When interest rates are low, you may obtain a lot more house for your money. Mortgage rates have dropped to an all-time low in the last year, and they’ve remained there for the past year. However, rates have started to climb in recent weeks. The average 30-year fixed rate was 3.14 percent this week.

What does this signify if you’re considering relocating?

Waiting till next year can end up costing you more money. Here’s how mortgage rates are expected to change in 2022, according to multiple experts.

Freddie Mac:

“The average 30-year fixed-rate mortgage (FRM) is expected to be 3.0 percent in 2021 and 3.5 percent in 2022.”

Doug Duncan, Senior VP & Chief Economist, Fannie Mae:

“Right now, we forecast mortgage rates to average 3.3 percent in 2022, which, though slightly higher than 2020 and 2021, by historical standards remains extremely low and supportive of mortgage demand and affordability.” 

First American:

“Consensus forecasts predict that mortgage rates will hit 3.2 percent by the end of the year, and 3.7 percent by the end of 2022.”

If interest rates climb by half a percentage point in the following year, it will affect how much you pay each month throughout the life of the loan – and that may add up quickly. As prices and mortgage rates rise, it will become more expensive to buy a home.

Industry analysts predict that rates will climb in the months ahead, as seen by the statements above. Here’s a table that compares other experts’ predictions and produces an average:

Projections for How Mortgage Rates Will Rise

Quarter Freddie Mac Fannie Mae MBA NAR Average of All Four
2021 4Q 3.2 3.1 3.1 3.1 3.13%
2022 1Q 3.4 3.2 3.3 3.3 3.3%
2022 2Q 3.5 3.2 3.5 3.5 3.43%
2022 3Q 3.6 3.3 3.7 3.7 3.58%

Buying before mortgage rates grow further higher can help you take advantage of today’s home buying affordability, whether you’re buying your first house, moving up to your ideal home, or downsizing because your requirements have changed. That might be the game-changer you’ve been looking for to help you reach your homeownership aspirations.

If you’re planning to purchase or sell a home in the coming year, it’s a good idea to act now rather than later, before mortgage rates rise. Reach out to your friendly and professional real estate agents at Trusted Property Advisors. Call us at  917-979-6666 today.