"The 30-year fixed-rate mortgage exceeded 4% for the first time since May of 2019," Freddie Mac Chief Economist Sam Khater said. "The Federal Reserve raising short-term rates and signaling further increases means mortgage rates should continue to rise over the course of the year. While home purchase demand has moderated, it remains competitive due to low existing inventory, suggesting high house price pressures will continue during the spring homebuying season."
One way that homeowners can get the best deal on their mortgage and potentially lower their rate is by comparing multiple lenders. Visit Credible to find your personalized interest rate without affecting your credit score.
Expect increasing Mortgage rates
Other mortgage rates also increased this week. The 15-year mortgage rose to 3.39% from 3.09% last week and 2.4% last year, according to Freddie Mac. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) increased to 3.19%, up from 2.97% last week and 2.79% last year.
After its meeting ended Wednesday, the Fed said it expects inflation will remain high and that several more rate hikes will be warranted. This will continue to push mortgage interest rates higher in the months to come, according to George Ratiu, Realtor.com’s manager of economic research.
"The Federal Reserve confirmed through this week’s rate hike, along with five more planned increases, that inflation is unlikely to slow down any time soon. Investors are reacting to the deepening war in Ukraine and expecting renewed supply chain disruptions to add additional pressures on consumer prices," Ratiu said. "Moreover, the ongoing labor shortage is pushing costs up, as companies are responding by offering higher wages, sign-on bonuses, and pay raises.
If you want to take advantage of current mortgage rates before they rise further, you could consider refinancing to save money on your monthly payment and over the life of the loan. Visit Credible to compare multiple mortgage lenders at once and find the one with the best rate for you.
How to lower your mortgage rates
Ratiu explained that the days of sub-3% mortgage rates are "firmly behind us." However, homeowners can still take steps to attempt to get a lower interest rate or lower their monthly mortgage payments. Here are a few:
Improve your credit score
A better credit score will mean lower mortgage rates. Homeowners that want lower rates should first focus on improving their credit history. This can be done by making on-time payments and paying down debt. You can monitor your credit score for free and get tips on how to improve it through Credible’s credit monitoring tools.
Compare multiple options when refinancing
Homeowners who want to refinance to lower their mortgage rate and reduce their monthly payment shouldn’t necessarily go with the offer from the first lender they talk to. Comparing multiple lenders can help borrowers find the lowest rate and the best mortgage lender for their financial situation. To see if refinancing is right for you, contact Credible to speak to a home loan expert and get your questions answered.