St. Cloud Mortgage Interest Rates Make Decisions Harder

Dated: September 6 2022

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What a difference a year makes—at least where St. Cloud home loans are concerned. For what seems like forever, the recommendations of experts, man-in-the-street consensus, and plain old common sense had all aligned to point to the same advice: take advantage of today’s home loan interest rates while you can!

The unanimity was comforting, especially since the decision to sign on the dotted line for a 30-year mortgage is a commitment that stretches decades into the future. But when everybody can agree that the entire history of homebuying verifies the wisdom of taking advantage of a loan offered at historically low interest rates, the only issue is whether the property being financed is reasonably priced.

 But now, at the end of last week, Money magazine summarized the reason why that reassuring unanimity had vanished from the scene. It wasn’t just that the week had seen mortgage rates drifting higher—it was the telling contrast with recent history that was most disconcerting. Per Money, the week’s rise of 0.11 percentage points meant—

“The current rate for a 30-year fixed-rate mortgage is 5.55% with 0.8 points paid…

The 30-year rate averaged 2.87% this time last year.”

That near-doubling might seem to be a slam-dunk reason for would-be borrowers to put their pens back in their pockets (and a steep decline in home loan applications indicates that more than a few did just that). Yet a review of the actual historical record of home loan rates puts that simple reaction in jeopardy—and might even encourage would-be buyers to think twice about ruling out mortgage offers at current levels. Over the entire month-by-month recorded history of 30-year fixed mortgages—that is, from April 1971 until last month—the average rate is a surprising 7.77! That’s two full percentage points higher than that 5.55%. Could it be that even now, it might be advisable to lock today’s offer?

If area buyers would find few experts urging that advice, they’d find just as few arguing the reverse—even though both decisions can be rationally concluded based on the evidence. One unambiguous outcome is that the comforting unanimity about the merit of today’s home loan offerings is a thing of the past. What a difference a year makes!

The decision to buy a home (or to list yours) depends on many factors—home loan expense is just one. For assistance with any and all of your St. Cloud real estate initiatives, I’m here to put my years of experience at your service. Do call!

Providing a superior level of informed, professional real estate services to buyers and sellers throughout Central Minnesota. We have agents specializing in residential, commercial, multifamily, new construction, existing, investment properties, foreclosures/REO, and short sales with offices located in:

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Saint Cloud 320-259-4554

Princeton 320-983-3555

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Premier Real Estate specializes in MANY areas around Central MN including Saint Cloud, Waite Park, Rice, Royalton, Sartell, Royalton, Little Falls, Cold Spring, Saint Joseph, Elk River, Monticello, Ramsey, Saint Michael, Andover, Ham Lake, Anoka, Champlin, Buffalo, Glencoe, Brownton, Silver Lake, Kandiyohi, Dassel, Minneapolis, Maple Grove, Saint Louis Park, Saint Paul, Robbinsdale, Crystal, New Hope, Brooklyn Center, Brainerd, Nisswa, Aitkin, Albany, Coon Rapids, Sauk Rapids and more!

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Noel Johnson

Passion for investing in real estate brought me to create Premier Real Estate Services in 2002. Years of purchasing, developing, and managing several rental properties, while assisting friends & cli....

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