There are two important home buying timelines on the horizon. The first is the historically low mortgage rates, hovering steadily below the 4% mark. The second is the rapidly accelerating pace of home prices and mortgage interest rates, threatening to make homeownership less affordable in two years than the pre-bubble real estate market. Whether you’re looking backwards or forward, the message is the same – now is the time to buy.

Rates Still at All-Time Lows

Last week, mortgage rates dropped for the fifth week in a row. Despite the increase in federal funds in December, both mortgage rates and the Treasury yield remain in the neighborhood of the early-2015 market lows. Average rates for the most popular home loan terms for the week ending February 4, 2016 include:

  • 30-year fixed-rate mortgage. 3.72% with an average 0.6 point (up from 3.59% last year).
  • 15-year fixed-rate mortgage. 3.01% with an average 0.5 point (up from 2.92% last year).
  • 5-year adjustable-rate mortgage. 2.85% with an average 0.4 point (up from 2.82% last year).

The Window of Opportunity

Mortgage borrowers looking to purchase or refinance can take another deep breath as rates remain under the 4% mark far longer than the market anticipated. Steadily dropping alongside mortgage rates is the buy vs. rent break-even point, which is as low as 1.3 years in Dallas and a little over three years in New York. But don’t hold your breath for too long. The window of opportunity to purchase or refinance is beginning to close.

A Not-So-Bright Future

Today, a median-priced home with a 30-year fixed-rate mortgage costs the average homebuyer 21% of median income – well below the 26% average in the stable years before the housing bubble. At the current pace of increasing home prices and interest rates (a 0.5% annual increase), the average monthly payment on the median home is expected to reach $114 within one year and $240 in two years. Both numbers make homeownership less affordable than the 2000 to 2002 levels.

Now is the Time!

Whether you’re looking to refinance or buy – now is the time. United Faith Mortgage proudly offers unique programs not offered by most lenders. Get in touch with us today. Our loan officers are only a phone call away.