The number of borrowers taking out new home loans reached amore than two-decade high.
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But those bargainmortgage ratesalso came at a cost.
The global pandemic caused a severe economic downturn, withwidespread unemployment, investment losses and financial instability.
Bad news for the economy is often good news for the mortgage market.
Typically, mortgage rates could only hit those levels during a recession.
The housing market has changed a lot since the homebuying boom of 2020-21.
Later next year, rates in the mid-5% are a possibility.
However, forecasts are constantly changing.
With the incoming Trump administration, much will depend on policy changes and their economic impact.
Plus, it’s possible toget a better deal on your mortgage(more on that below).
This impacts longer-term interest rates like30-year fixed mortgage rates.
Simply put, the Fed keeps that benchmark rate low when it needs to stimulate economic growth.
The COVID-19 pandemic then sparked another economic crisis.
Mortgage interest rates fell quickly, bottoming out in the mid-2% range in 2021.
By early 2022, the Fed had a new problem on its hands: inflation.
Average mortgage rates skyrocketed, peaking past 8% in late 2023.
But the road there could be long and bumpy.
In fact, many economists and housing market experts hope they don’t.
it’s possible for you to actually score a lower rate.
Another option is to purchasemortgage points, also known as discount points, to get a lower interest rate.
Buying a home is likely the biggest transaction you’ll make in your lifetime.
Regardless of the market, carefully assess your needs and what you’ve got the option to afford.
