Mortgage rates are still at historic highs despite the highs – what else to consider when buying a home now

If you’ve been paying attention to mortgage rates, then you know that very high now than last year. The average 30-year fixed rate mortgage in the US stood at 6.15% as of January 19, 2023, according to Freddie Mac. This is up from 3.56% last year.

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What you may not know is that even though prices have almost doubled in a year, they are still low compared to where they were in the past. In fact, mortgage rates are only high right now because they are at historic lows. For most of the 2010s, the average rate on the 30-year FRM hovered at 5% or less – which is more than it was a decade ago.

Mortgage rates in 2000 mostly stayed above 6%, according to St. Louis Fed. In the 1990s, average rates were typically 7% or more. The lowest rate in the 1980s was 9.06% in February 1987, while the highest rate of that decade was 18.27% in September 1981. In most of the late In 1970, the average mortgage rate remained above 9%.

Based on those numbers, a 6.15% mortgage rate suddenly doesn’t seem expensive. While mortgage rates are certainly an important factor when buying a new home, they are far from the only consideration. Here’s a look at four more things to consider when buying a home now:

Housing Price

For home buyers, one good thing in 2023 is that prices are expected to continue to fall from the record highs they had two years ago. Fannie Mae expects home prices to fall 1.5% nationwide this year, according to a report from Experian. But others are expecting a bigger fall – including analysts at Goldman Sachs, who expect housing prices to fall by 5%-10% next year.

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Take a look at the many housing prices that may drop in the country and it won’t be worth it if you move to a market that continues to rise. get angry For example, a number of Florida cities continue to see housing prices rise in 2022 despite the slowdown in the overall US market. If you plan to buy a home in a market where demand continues to outstrip supply, expect to pay top dollar.

Credit Score

Although mortgage rates are falling, you can’t take advantage of lower rates if you don’t. get a good grade. A good score is usually between 670 and 739, CBS News reported. If you’re at this level or higher, you have a better chance of getting approved for a mortgage with the best interest rates – something that can help you save tens of thousands of dollars a year. life of the mortgage.

When to make an offer

Even though the housing market is cold in most of the United States, that doesn’t mean you won’t face competition for the right home at the right price. If you find a home that checks all your boxes, make a quick offer. Buyers who wait around to see if the seller will drop their prices may be making a costly mistake.

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“All they do is increase the chance that another buyer will find the same home and make an offer,” said Gary Reggish, a regional vice president at the National Association of Realtors. CBS News.

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This article originally appeared on Mortgage rates are still at historic highs despite the highs – what else to consider when buying a home now

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