Assuming you have very good credit (a FICO credit score of 740+) and you’re buying a single-family home as your primary residence, you should be able to get a 30-year fixed mortgage at below 3% in New York today. Mortgage rates have fallen to record lows this month due in part to the continued support from the Federal Reserve.
Mortgage rates are tied to the basic rules of supply and demand. Factors such as inflation, economic growth, the Fed’s monetary policy, and the state of the bond and housing markets all come into play. Of course, your financial health will also affect the interest rate you receive. So do your best to keep it as healthy as possible.
So where do rates go from here?
Mortgage rate trends are difficult to predict because they are based on many factors, most of which are, well, pretty unpredictable. With continued support from the Fed, mortgage rates should remain relatively low for some time. Most economists believe that rates will either hold relatively steady or uptick slightly in the near term.
If the economy continues to improve, some experts fear that all of this stimulus and Fed monetary support will create higher inflation, which is a main driver of mortgage interest rates. If inflation rises, rates rise. On August 12th the Core Consumer Price Index showed inflation rise at the fastest rate in nearly 30 years. One number doesn't make a trend, but if we see future inflation increases, home loan rates will move higher as well.
Economic growth indicators, such as gross domestic product (GDP) and the employment rate, also influence mortgage rates. Higher economic growth levels generally produce higher incomes and higher levels of consumer spending, including more consumers seeking mortgage loans for home purchases. That's all good, but the upswing in overall demand for mortgages tends to result in higher mortgage interest rates.
Bottom line is that because mortgage interest rates are based on so many economic factors, it is difficult to say whether they will go up, down, or hold steady. Whatever happens, now is a good time to buy. Home prices have been holding steady or increasing, and because of the high demand for housing coupled with low housing inventory, prices are not likely to go down any time soon.
If you need help finding that 'just right' new home and a referral to an excellent lender, contact us. We have been helping buyers achieve their goals in the Hudson Valley for over 30 years.
