The past year has seen unpredictability across the mortgage industry. As such, understanding where the mortgage rates are going can be challenging. However, when we take a look at MD mortgage rates, we can get at least a sense of what to expect over the next months and through later in the year. Today, we break down the forecast for where MD mortgage rates are going.
What are the Current Rates Like?
Today, the average interest rate for a 30-year fixed-rate mortgage loan stands at 2.827%. That is low when you consider that in January 2020, just before the pandemic, that rate sat at nearly 3.7%. This low rate has been driven by a variety of factors, most prominently the effect of the COVID-19 pandemic on the US economy. Following the emergence of the pandemic, lowered rates drove a mass buying spree by consumers. Federal policies and interventions have also helped keep the rates low. To learn more, check out our blog about this topic.
Where are Mortgage Rates Headed?
Eventually, experts predict that rates are due to rise again. The “when” is the question that many are struggling to answer. The fear many would-be homeowners and some economists have voiced is that there may be a bubble on the verge of popping. However, this appears to not be the case. Bubbles typically occur when artificial factors drive demand and raise prices, factors that aren’t representative of the actual economic circumstances. So if we put that idea aside, we then have to focus on when we expect MD mortgage rates to rise, and by how much. NextAdvisor spoke with five experts on this topic, and the answer seems to be “soon.” Trends in the building industry have begun to finally settle. During the pandemic, exploding home sales drove a huge increase in home building, and contributed to a run on building products. This only served to drive home prices up, creating bidding wars between prospective buyers. One factor that may drive an increase in mortgage rates is as one NextAdvisor expert put it, “buyers fatigue.” Due to some buyers being priced out of the current market, many prospective owners will simply wait out the low rates until competition is eliminated.
Are Low Rates a Good Thing?
Low mortgage rates have obvious appeal to buyers. Everyone wants a good deal. But when we’re analyzing where MD mortgage rates are going, it’s important to also understand the downsides that come with low rates. Namely, the ongoing low rates have created an incredibly competitive market for prospective buyers. Homes across the country have seen bidding wars, and are frequently selling for sums greater than their listed value. This can make it difficult to find the right home at a great price. Higher rates can bring more stability to the market, and allow qualified buyers to be more prepared when shopping.
The low rates we’ve seen last throughout the pandemic period are set to come down, perhaps later this year or perhaps over the next. If you want to be prepared to find the home that’s right for you, reach out to the team at Federal Hill Mortgage today. Our expert team is the number #1 loan originators on the East Coast. Get started today by filling out a quick application.