Just San Ramon Homes

When Will The 3% Mortgage Rate Return?

3% Mortgage Rate

If you’ve decided to postpone selling because you have a great interest rate on your present mortgage, it’s possible that you could wait longer than you’d planned.

If you want to move to a bigger home, for example, not only could you need a bigger mortgage but the interest rate on your new loan would be quite a bit higher than your present one.

But if you’re waiting for the rates we saw in 2021 (which came down to to under 3%, according to Freddie Mac), you may never buy. Here’s why.

Almost every economist has predicted that the 3% mortgage rate will probably never return. This is because the mega-low rates were triggered by a unique, unforeseen set of circumstances that began with a global pandemic in 2020. Thankfully, pandemics are rare.

While some forecasters predict that rates will decline over the next 12 months, they don’t see rates dropping below 5% any time soon. One MLS chief economist described the feelings of many would-be home buyers:

“People are still working through their five stages of grief on this mortgage rate stuff. And I think you have to reach the stage of acceptance … rates aren’t going to come down to where we were back during 2020 and 2021.”

One piece of good news is that Inflation is coming down. Fast! The consumer price index rose 3% last month from a year ago, the smallest advance in more than 3 years (Bureau of Labor Statistics). Excluding food and energy, the core CPI – which economists view as the better indicator of underlying inflation – advanced 4.8%, also the lowest since 2021. Appliances and furniture are witnessing Deflation of around 1.5%….that’s good for housing costs. (WSJ)

So mortgage rates might drop a little in the short term, but if you’re stuck in a property that isn’t right for you, maybe it’s time to accept the current rate atmosphere, buy that next home, and enjoy the truly unique rewards of home ownership. And when rates do come down to more realistic levels, you can always refinance your loan with a mortgage at a lower rate.

Share via:

Wait! Please Don't Go!

Get full details of all homes for sale in San Ramon right now! Detailed descriptions, unlimited large photos and more. Just fill in the form and we’ll get right on it!

Share via
Copy link
Powered by Social Snap