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Jan. 21, 2022, 11:16 a.m. EST

These are today’s mortgage rates — and experts weigh in: Is now a good time for you to buy a home?

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Alisa Wolfson

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Mortgage rates have ticked up a bit higher in the new year, though they still remain near historic lows: The average interest rate on a fixed rate 30-year mortgage now sits at 3.68% (the average annual percentage rate is 3.74%), and on a 15-year fixed rate mortgage is 3.03% (the APR is 3.18%), according to today’s data from Bankrate. You can see what mortgage rates you qualify for here.

Source: Bankrate

What do these mortgage interest rates mean?

Fluctuations in mortgage interest rates are common — and can occur because of a variety of things, such as inflation, economic growth and monetary policy changes. Most fluctuations are small, but “a quarter point move in the span of a couple weeks would be significant,” explains Greg McBride, chief financial analyst at Bankrate.

How much does the interest rate really matter?

While a difference of 1% may not sound like a lot, it can add up to tens of thousands of dollars over the life of a loan. On a $300,000 30-year fixed rate mortgage with a 3% vs. a 4% APR, you’d end up paying more than $60,000 more for the mortgage at the higher rate.  Here’s a guide on whether or not you should buy points to lower your mortgage interest rate.

Will mortgage rates increase soon?

Of course nobody has a crystal ball, but many experts expect mortgage rates will rise in the next year or so. As MarketWatch Picks recently wrote , Daryl Fairweather, Redfin chief economist, expects “mortgage rates to slowly rise to 3.6% by the end of 2022.” This, he says, is because the Fed is tapering mortgage backed security purchases and we’ll feel the effects in mortgage rates. Dr. Lawrence Yun, the chief economist at the National Association of Realtors (NAR), forecasts the 30-year fixed mortgage rate to increase to 3.5% by the end of 2022. And Realtor.com predicts an average mortgage rate of 3.3% throughout the year, hitting 3.6% by end of year; and Bankrate thinks rates could hit 3.75% at some point during the year. “But there will be ups and downs along the way as concerns about slower economic growth creep in,” says Greg McBride, chief financial analyst at Bankrate.

Is now a good time to buy a home?

There’s been a lot of change in the housing market in the last year and a half so Holden Lewis, home and mortgage expert at NerdWallet, says he thinks it’s foolhardy to forecast how housing prices will change. “It’s best not to try to time the market. If you wait on the expectation that prices will fall in a year or two, you might be disappointed.” Instead, buy now if you’re sure you’re ready and you can afford a home … it’s a highly personal question without a one-size-fits-all answer,” says Lewis.

And Denny Ceizyk, LendingTree’s senior staff writer for mortgage, recently told MarketWatch Picks that the decision of whether to buy now depends on whether you’re financially prepared for homeownership and how long you plan to live in the home you’re buying, because even if home prices dip, they generally recover in the long run. “While home prices are rising, interest rates remain [near] 60-year lows, making it much more affordable to buy higher-priced homes. At some point, inflation pressures could push mortgage rates higher, which argues for buying sooner than later,” says Ceizyk. But others disagree: Nicole Bachaud, economic data analyst at Zillow, recently told us: “The market today is very competitive and bidding wars are common in many areas of the country. With inventory trending up, waiting to buy could mean a more balanced market between buyers and sellers.” 

That said, if you’re ready to buy and stay long term, these may be some of the best mortgage rates you’ll get. But be sure to shop around to get the best rates , and find a home you can afford without too much stress on your budget. It’s also important to consider other costs like closing costs (these tend to run roughly 2-5% of the cost of the loan), insurance and property taxes.

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