Mortgage rates are up, but are they too high?

interest-rates Anyone who has been home shopping over the last month knows that mortgage rates have been going up. A month ago the national average for a 30 year fixed conventional loan was close to 4.8% while today it is closer to 5.65%. So mortgage rates have jumped up, but is that to high to consider purchasing now?

While we may have been spoiled by those sub 5% rates over the last month, in no way is that indicative of what we should be expecting for interest rates. We won’t even go back to 1979 and 1980 when interest rates were close to 20%, we will just look at the rates from 1987. 

  • From 1987-1990 each year the average 30-year mortgage run above 10%
  • From 1991-2000 the average 30-year fixed mortgage ran 7.9%, and only once was it below 7.3%, that was in 1998 when it was 6.94%.
  • From 2001-2007 the lowest average rate for a year was in 2003 when the average rage was 5.83%.

So as you can see from recent history if a lender tells you they can lock you in at 5.7% it may seem high compared to what you saw on the news over the last few months, but historically we are still talking about low interest rates.