We saw mortgage rates drop a little bit more last month. The most recent decrease will save new borrowers an additional $5.35 per month for every $100,000 borrowed. Average U.S. rates for 30-year fixed rate mortgages were at 4.46% at the end of January. At the end of December, they were sitting at 4.55%. 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.
Recent forecasts for changes in interest rates have been all over the board. Quite frankly, a good case can be made for rates staying relatively flat for the rest of the year. Regardless of any movement we see, 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 about $230 per month per $100,000 borrowed. That makes mortgaging today’s homes considerably more affordable than historic averages.
That said, mortgages are just a little more expensive now than they were last year at this time. The average increase in monthly payments per $100,000 borrowed with a 30-year fixed price mortgage is around $4 per month. If you max out a conventional mortgage, that means your monthly payment will only be around $17 more per month now than it would have been in February of 2018.