Mortgages Blog

Finance Blogs » Mortgages » Is 4 percent a normal rate?

Is 4 percent a normal rate?

By Judy Martel · Bankrate.com
Friday, December 20, 2013
Posted: 1 pm ET

Mortgage rates may continue to hover around historic lows, but 83 percent of homeowners in a recent survey don't see anything unusual in a 30-year fixed rate below 5 percent, and 27 percent of them said a normal range is between 3 percent and 4 percent.

In fact, the 30-year fixed has averaged 6.73 percent since 1990 in Bankrate.com's weekly index. It wasn't until May 2010 that it dropped below 5 percent. (In May 1990, it hit 10.45 percent.)

Spoiled by recent low rates

Real estate brokerage Redfin polled both seasoned and first-time homeowners in 22 major metro areas. Among the seasoned buyers, a quarter of them thought a rate below 5 percent was normal, while a third of first-timers thought that.

The Federal Reserve said in its latest meeting that it will begin tapering its easy money policies. The interest rate on the 30-year-mortgage rose 3 points to 4.58, according to the most recent Bankrate survey of large lenders.

Some folks are in for an awakening

Buyers' perception of what's normal when it comes to rates is important to the recovering housing market because they could retreat if they feel they are paying too much. More than 40 percent of the survey respondents said they would be unable or unwilling to buy a home if rates rose much higher than where they are.

Keep up with your wealth and mortgages and follow me on Twitter.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
3 Comments
klik hier
January 31, 2014 at 3:16 am

I think your topic is useful for me thanks for that.

sam james
January 03, 2014 at 3:28 pm

Yes, it is (or it should be) normal that money gets cheaper as time goes by. As more money is floating around, the rates get lower. The only way for the rates to go up is that those who have the money would find something more lucrative to put the money into. But there is so much money / wealth that investors are happy with much much lower rates that we had in the middle age.
The only reasonable trend for the rates is downward.

david arellanes
December 26, 2013 at 9:42 am

My rate for a rental condo in las vegas is 6.25% the current rate I believe is 4.45% is it still worth refinancing to save maybe if lucky 200.00 a month under the HARP or HAMP program. Sceondly are these programs ending 12-31-13. If I start the process now but finish in 2014 still okay thank you awaiting your response

Add a comment

(Comments may take 5-10 minutes to appear)