Home buyers have enjoyed low interest rates for nearly a decade, but now they are on the rise. This rise in the interest rates is causing some prospective home buyers to second guess whether purchasing right now is really in their best interest, but despite the recent increase in rates, they remain historically low.

A brief history of mortgage rates

The government-chartered business and industry standard Freddie Mac began recording U.S. mortgage interest rates in 1971, and the average rate since then has been just a little below 8%, which makes today’s interest rate, which recently went above 5%, still a great deal. The highest interest rate recorded was nearly 17% in 1981, while the lowest rate was in January 2021, when rates were at 2.65%.

Why are mortgage rates on the rise?

During the height of the Coronavirus pandemic, the economy suffered severe economic blows, and mortgage rates were pushed down to keep money flowing. Now, the economy has recovered for the most part and inflation is at a 40-year high. In order to battle this inflation, the Fed has raised the rates and will probably continue raising the rates for the foreseeable future.

What factors affect your mortgage rate?

Despite the rise in the mortgage rates, there are things that you can do to keep your individual rate as low as possible. In general, the better your credit score and the more you can put down as a down payment, the lower your interest rate will be. The type of loan you are applying for, the terms of your loan, and the amount you are borrowing also affect how much your interest rate will ultimately be.

Now is still the time to buy.

So, despite the recent bump in interest rates, this is still the perfect time to buy. Many mortgage lenders are allowing lenders to lock in the current interest rate for as much as 30-45 days when they qualify to save money should the rates increase. And when the time comes to finally purchase your dream home, Eastland Escrows helps make the process simple with its easy-to-use escrow form that can be printed and returned when you make a contract on the perfect home.

If you’re a real estate agent or broker representing buyers and sellers. Or, if you are considering buying or selling a home, please consider calling Eastland Escrows, Inc. to manage the escrow account. We are an independent escrow company based in Covina, CA serving Southern California since 1973. With more than 100 years of combined experience, we pride ourselves in working like a dog on behalf of all our clients! We have closed thousands of escrow transactions from real estate sales and refinances to business sales and mobile homes.