If you’re planning on buying a new home, it’s important to know what to expect ahead of time. Mortgage rates are always changing, which is why it’s important to learn as much as you can about current trends in the industry. In 2021, many changes will affect the real estate industry, and staying aware of these changes will allow you to make the best decisions for your needs. Keep these guidelines in mind so that you can make the right choice for your own needs.
What to Expect in 2021
According to experts, mortgage rates are expected to increase later this year. This trend may continue to increase over the next several months as well. As long-term bond rates are set to rise during this year, many consumers may find themselves wondering why this trend is taking place. Here’s what we know so far.
First, it’s important to keep the COVID-19 pandemic in mind when talking about mortgage rate trends. Although 2020 saw many major setbacks in the face of the escalating pandemic, 2021 already shows potential for a much better year financially. There are numerous factors contributing to the overall positive outlook for mortgage rates.
One of the most significant improvements in the fight against COVID is the release of a vaccine. With several medical companies releasing highly effective vaccines, the economy is expected to see substantial growth. This also directly impacts inflation, which causes long-term bond rates to increase.
Another key point to remember are long-term Treasury bond rates. These rates are a key indicator for mortgage rates, which means it’s a good idea to keep them on your radar. The 10-year Treasury yield increased to 1.18% in February, and it’s expected to continue in this direction throughout the next few months of 2021.
Main Factors to Consider
While these predictions help shed some light on the future of mortgage rates, it’s important to note that the future of the housing industry depends heavily on several pertinent factors.
First, experts note that it’s crucial to pay attention to how well the pandemic is handled from here on out. Depending on how quickly new vaccines are produced and how seriously people take social distancing measures, the pandemic could move in the right direction. This in turn will have a significantly positive impact on the housing industry and mortgage rates.
Mortgage Rates: The Bottom Line
There’s much to look forward to in 2021 as coronavirus rates decrease and the vaccine continues to demonstrate promise for Arizonans. Keep these trends in mind whether you’re planning on buying a new home or have already refinanced. They might just be exactly what you need to secure your dream home in the new year.