Average U.S. mortgage rates started 2021 near historic lows and have hovered in that vicinity through January. That news has likely reached and encouraged your clients, but emphasizing in real terms how much it will benefit their bottom line can provide valuable context for their homebuying decision.
The average rate for a 30-year fixed-rate mortgage was 2.77% as of January 21, according to Freddie Mac. The average was 3.62% in January 2020 and 4.46% in January 2019, 85 basis points and 169 basis points higher, respectively, than the current rate. A buyer who purchases a $300,000 home at the average rate today would save just over $100,000 during the mortgage term compared to purchasing the same home two years ago—and the monthly payment would be almost $200 less.
Limited housing supply and low mortgage rates have contributed to increased competition and home prices, but the cost of borrowing money for a home is currently so low that buyers may be able to afford more than they would have one or two years ago.
Monthly mortgage rate averages stretching back to 1971 are available in MarketViewer (intinent.com login required), the powerful data and market statistics tool available exclusively to Texas REALTORS® members. Use that data to show your clients the additional buying power they can now take advantage of thanks to low mortgage rates.
Being a real estate professional for 37 years now have never seen rates this low;Texas surge in sales either! People are able to buy so much more property driving costs up and out of reach for some. No matter how low the rates get, the pricing will affect and impact the lower income buyers create the same rise in rentals. My concern is people with lower wages not being able to find any housing. We are seeing a surge in mobile homes and RV living as well, but the land to put those on is slim. This needs to be… Read more »
I agree. I have several clients who gave up on their dream because even with the low interest rates they cannot afford the prices or compete with investors who can easily offer more and forgo an inspection and appraisal. I lost one bid to an investor who offered 20K over the asking price! Now some builders go and asking for offers and take the highest offer. Never heard of this before and I am in the business for over 30 years.