“Marry the house, date the rate.” That’s the advice realtors and mortgage lenders are giving worried homebuyers as mortgage rates reapproach the two-decade high of 7% reached in November. In other words, don’t be afraid to commit to the house you love, because you can just refinance when rates come down in the next couple of years.
But frankly, it’s bad advice. New homeowners may come to find they’re in a longer-term relationship with today’s rate than they expected.
Yes, for the last 10 years (before last year’s uptick) rates were much lower, averaging 3.78%. But that doesn’t mean they’ll drop back to those levels anytime soon. In fact, the bond market is starting to price in higher benchmark interest rates following stronger economic data.
