We saw mortgage rates drop slightly last month. The most recent decrease will save new borrowers an additional $3.03 per month for every $100,000 borrowed. Average U.S. rates for 30-year fixed rate mortgages were at 4.81% at the end of November (and are even a little lower as I am writing this). At the end of October, they were sitting at 4.86%. We are continuing to see a bit of a zig zag approach to the market with a few months of rising rates followed by a month or two of decline.
We do expect interest rates to generally rise over the next twelve months. Even so, we will still be considerably lower than the long-term average mortgage interest rates in our country. While it’s hard to believe in today’s environment, the long-term average is still over 8%. When you compare monthly payments at today’s rates versus the long-term average, homeowners are currently saving almost $215 per month per $100,000 borrowed. That makes mortgaging today’s homes considerably more affordable than historic averages.
That said, mortgages are more expensive now than they were when the year started. The average increase in monthly payments per $100,000 borrowed with a 30-year fixed price mortgage is $48 per month. If you max out a conventional mortgage, that means your monthly payment will be around $219 more per month now than it would have been on January 1st.