10-year-chart

The chart above shows the average 30-year fixed mortgage rates from January 2006 until 29 November 2016. While the overall trend over the last 10 years has been lower rates, we are beginning to see a small uptick with sub 4% mortgage rates becoming more difficult to secure.

While a similar rise was seen in 2013 (see chart below) with rates lowering again by early 2015, it is difficult to imagine this same trend occurring in 2017. Even if the same trend occurs, home buyers will not see sub 4% mortgage rates until 2018.

low mortgage rates

If the US economy begins to improve in 2017 mortgage rates will also begin to climb higher. While a one-half percent may not seem that substantial, it is important to consider the cost difference monthly and over the life of your 30-year mortgage.

30-Year Fixed Mortgage Rate on $250,000 Home Loan

  • Monthly payment examples do not include insurance or taxes
  • ( ) shows the additional costs comparing 4.00% to the higher rate
Interest Rate                Monthly Payment                           Total Cost of Loan
4.00%                             $1,194                                                  $429,674
4.25%                              $1,230 (up $36)                                $442,746 (up $13,072)
4.50%                              $1,267 (up $73)                                $456,017 (up $26,343)
4.75%                              $1,304 (up $110)                               $469,483 (up $39,809)
5.00%                              $1,342 (up $148)                               $483,139 (up $53,465)

Based on the recent mortgage rate increase, and the chances of going higher, people considering buying a home in 2017 may want to buy earlier in the year instead of waiting until late Spring or Summer.

If you are interested in home buying or selling, visit our web site The MORENO Group.