Despite continued Fed policy to lower consumer borrowing costs and spur the economy, mortgage rates have remained at levels higher than economic officials would like. In fact, since the beginning of October the national average 30 year mortgage rate has climbed roughly 0.5% and Evansville rates generally followed this trend. For example, banks were offering between 3.75% and 3.875% for 30-year mortgages just two weeks ago- as of today the same figures were between 4.25% and 4.375%.
Rates are persistently high when compared to similar maturity treasury instruments which historically have rates 0.5% lower than mortgages. This spread is over 1% now. When consumers are evaluating whether they should refinance a home mortgage or buy a larger property (to capitalize on weak real estate market pricing) it’s important to gain historical perspective to inform those decisions.
For those who are concerned rates could fall back down and provide an even better opportunity to finance or refinance, two things should be considered: 1) seizing attractive, historically-low rates generally makes sense, even if it’s not perfect timing and 2) if rates fall back down in the future, refinancing costs could be considered an insurance policy that protected you from something worse—waiting too long and missing this opportunity entirely.