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    Will Mortgage Rates Remain Low Next Year?

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    In 2020, homebuyers got a big boost in the housing market as mortgage rates dropped throughout the year. According to Freddie Mac, rates hit all-time lows 12 times this year, dipping below 3% for the first time ever while making buying a home in Central Florida or New Smyrna Beach more and more attractive as the year progressed (See graph below):

    Will Mortgage Rates Remain Low Next Year? | MyKCM

    When you continually hear how rates are hitting record lows, you may be wondering: Are they going to keep falling? Should I wait until they get even lower?

    The Challenge with Waiting

    The challenge with waiting is that you can easily miss this optimal window of time and then end up paying more in the long run. Last week, mortgage rates ticked up slightly. Sam Khater, Chief Economist at Freddie Mac, explains:

    Mortgage rates jumped this week as a result of positive news about a COVID-19 vaccine. Despite this rise, mortgage rates remain about a percentage point below a year ago.”

    While rates are still lower today than they were one year ago, as the economy continues to get stronger and the pandemic is resolved, there’s a very good chance interest rates will rise again. Several top institutions in the real estate industry are projecting an increase in mortgage rates over the next four quarters (See chart below): Will Mortgage Rates Remain Low Next Year? | MyKCM

    If you’re planning to wait until next year or later, Mike Fratantoni, Chief Economistat the Mortgage Bankers Association (MBA), forecasts mortgage rates will begin to steadily rise:Will Mortgage Rates Remain Low Next Year? | MyKCM

    As a Central Florida or New Smyrna Beach homebuyer, you need to decide if waiting makes financial sense for you.

    Bottom Line

    If you’re planning to buy a home and want to take advantage of today’s low rates, now is the time to do so. Don’t assume they’re going to stay this low forever. Over the next year, we will likely see home values rise even higher given the continued lack of inventory of homes for sale. Connect with Debbie Summers, REALTOR with Charles Rutenberg Realty @ 407-758-1020 by call or text to get started on the path to homeownership.

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