Buyers appear to be getting “off the fence” as they see mortgage rates beginning to rise. How costly can waiting be?
Even a fraction of a percentage point rise quickly adds up. According to realtor.com, on a $300,000 purchase with a 30-year fixed-rate mortgage and a 20% down payment, the difference between 4% and 5% is $142 a month. That’s more than $51,000 over the life of the mortgage.
According to the realtor.com article, it’s important to note that mortgage rates are still low. After falling from a high of 18.63% on Oct. 9, 1981 they averaged about 7% from the 1990s through the 2008 financial crisis. They dropped below 5% for the first time in March 2009, before bottoming out at 3.1% on Nov. 21, 2012.
After those recent historic lows, average mortgage rates have now reached their highest levels in more than four years. They hit an average 4.43% for 30-year, fixed-rate loans as of March 1, according to data from Freddie Mac. This is the highest they’ve been since Jan. 9, 2014, when they averaged 4.51%.