Are Mortgage Rates Going Up or Down?


Whether You Plan to Buy or Sell a Home in Texas, Check Out the Latest Forecast on Mortgage Rates in 2021

Rates for mortgage loans have been exceptionally low over the past year, hitting a historic all-time low in September 2020. That has been a boon to the housing market, fueling home buyer demand while enticing some on-the-fence sellers to list their homes.

Although the housing market remains strong, with some real estate market experts predicting home sales in 2021 to double those in 2020, mortgage rates have been on the rise. And 2 in 3 experts predict that those rates will continue to go up.

So, what does that mean for Texas homebuyers and sellers?

Here is a closer look at how rising mortgage rates may impact housing prices, inventory, and other market factors.

Should I Still Buy a Home If Mortgage Rates Are on the Rise?

Although rising interest rates will make it more expensive to borrow, mortgage rates are still relatively low, experts have pointed out. In fact, they have noted that, as of February 2021, activity in the housing market was up about 7%, when compared to the same time last year.

If you are shopping for a home while watching mortgage interest rates climb, consider these points as you decide whether now is the right to buy:

  • Experts predict low mortgage rates to stick around for a couple of years: Eager to lock in low, some buyers may be feeling the pressure to make a home purchase ASAP. However, real estate industry predictions say mortgage rates should stay around 3.1% to 3.3% in 2021, and many anticipate the low rates will remain for at least a few years.

  • Interest rates should not be the only number you look at: Borrowers need to keep a close eye on mortgage rates and evaluate them in terms of purchase prices. This means crunching some numbers and taking a hard look at the short- and long-term costs of mortgage loans, based on rates and home prices. Depending on what you plan to put down, the price of a home, and the interest rate you lock in at, it can be possible to save money borrowing even if rates are rising.

  • Resist FOMO: Fear of missing out (FOMO) can be real for buyers, especially first-time buyers who are shopping in a seller’s market. Given that low interest rates are expected to stick around and that rushing to buy can be a big mistake for such a major purchase, it’s essential for homebuyers to keep a level head, instead of rushing to buy and possibly making a bad deal just to appease their aching sense of FOMO.

Should I Stay or Sell a Home When Mortgage Rates Rise?

Although low mortgage rates can push buyer demand and create a seller’s housing market, homeowners with houses on the market in Texas can still benefit from the rising-rate environment we’re seeing in 2021.While your individual circumstances will dictate whether it’s in your best financial interests to list your home or wait to sell as interest rates rise, consider your local real estate market as you make this decision.

The fact is that experts are anticipating a general shift from a seller’s to a buyer’s market as interest rates rise—and that may not apply in your local area, especially if you own a home in one of Texas’ hotter real estate markets, like in Houston, Dallas, San Antonio, or Austin. Some of these areas may be more immune from national trends, creating conditions for buyer demand to remain strong and housing prices to stay high.

That can make it beneficial for home sellers to list their houses now and still take advantage of relatively low interest rates when they turn around to buy a new home in Texas.

Rising Mortgage Rates & The Housing Market: The Bottom Line

As interest rates bounce back from the extraordinary lows reach in 2020, it’s important for home buyers and sellers to put them in context. While lower rates may be ideal for buyers or sellers, it’s important to remember that:

  • Rates can’t fall forever.
  • The rise in rates is a reflection of natural adjustments in the market, which many expect to level out the imbalances in inventory versus demand.
  • Rising mortgage rates can be a response to moderate economic growth, rising wages, and other market conditions.
  • Your circumstances impact whether rate changes make it an opportune time to buy or sell a home in Texas.

Buying or Selling a Home in Texas? We Can Help!

If you are thinking about selling a home or buying a new house in Texas, get experienced help and cash back at closing when you work with the 5-star Realtors® at New Home Gurus. We can guide you through the process, helping you with offers, negotiations, and closing. Then, at closing, we’ll split our commission with you!

Homebuyers and sellers who work with New Home Gurus can get back an average of $4,500 to $12,000 at closing.

How Much Cash Can You Get after Closing?

Call (281) 668-8124 or Email Us to Find Out Now

We are standing by, ready to answer your questions and explain the details of our commission-sharing program.


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