Back in early February, interest rates for a 30-year fixed-rate conforming loan were hovering around 2.5%. As of the last few days or so (prior to the recording of this video), the average rate on that same loan was closer to 3.2%—up from 3% at the beginning of March. Believe it or not, you have to go way back to July 2020 to see interest rates this high. It’s clear 2021 won’t be a second consecutive year of watching rates limbo to new record lows on every month. What does this upward trend in rates mean for buyers and sellers?
If you’re a seller, the good news is that inventory remains chronically low throughout the San Fernando Valley and there’s still a lot of demand. The number of showings that we’re seeing on our listings hasn’t budged. You just need to do your due diligence as a seller to make sure your buyer touches base with your agent’s lender of choice to verify that they’re still qualified at the new interest rate.
“Don’t lose sight of the bigger picture; this new decade has seen the lowest rates in history.”
If you’re a buyer, this is still the time to act. The rates are a bit higher, sure, but they’re still historically low; that’s why we haven’t seen demand taper off yet. The house that you can see behind me in the video above was sold before it ever came on the market. The buyer whose offer we accepted was aware of the increase in interest rates, but they were also savvy enough to know that this new decade has seen the lowest rates in history. As the economy recovers, vaccines are distributed, and the threat of inflation grows more real, it’s possible that rates will be quite volatile over the next several months. My advice: Lock in these low rates while you still can.
As always, feel free to reach out if you have questions about this or any other real estate topic. I’m happy to be a resource for you and assist with whatever buying, selling, or investing needs you may have.
