This is a great time to buy a new home in Bryan-College Station.
While mortgage rates have recently edged up a bit, they continue to hover around their recent all-time record low of 2.65%. That makes this an excellent time to buy a new Bryan-College Station home, since you’ll pay less interest over the life of your mortgage loan.
Another compelling reason to buy now is uncertainty over what will happen with mortgage rates in the future.
Why are Rates So Low?
One reason mortgage rates haven’t moved much lately is that lenders appear to be waiting for more clues on how the economy will move forward. According to Matthew Speakman, an economist with Zillow, lenders want to see what happens with the next stimulus checks and the rest of President Joe Biden’s COVID relief plan.
“In the near-term, that path forward will depend largely on the fate of the next wave of fiscal relief and COVID-19 vaccine developments,” Speakman says. Congress appears to be moving quickly on Biden’s pandemic package. When new stimulus checks start being distributed, Americans could feel more upbeat about their finances and the overall economy. That optimism, however, could lift mortgage rates.
Mortgage rates tend to track the interest rates on Treasury bonds. Those bond yields have already been hitting their highest levels in over a year as Biden’s plan and vaccine breakthroughs are making investors feel more confident.
Investors have been pulling their money out of Treasuries, which are seen as fairly safe investments, and moving it into stocks, which are riskier. The drop in demand for Treasury bonds has pushed their prices down and has raised their yields.
Freddie Mac chief economist, Sam Khater, recently said, “The run-up in Treasury rates has not impacted mortgage rates yet, which have held firm.” But mortgage rates could catch up before long. If you’re considering buying a new Bryan-College Station home, your safest bet is to lock in today’s low interest rates just to be on the safe side.
How the Federal Reserve impacts Mortgage Rates
The Federal Reserve doesn’t directly set mortgage rates, but the central bank does set the overall rate environment. The Fed slashed rates when the coronavirus recession began, and it has signaled that it will keep rates low for years, which will translate to little upward pressure on mortgage rates.
There is a strong correlation between the rate on 10-year Treasury bonds and the 30-year mortgage. That spread widened in the spring and summer.
The typical gap between the 10-year government bond and the 30-year fixed-rate mortgage is 1.5 percentage points to 2 percentage points. At the beginning of the COVID-19 pandemic, that spread rose as high as 2.7 percent. However, the gap has now returned to normal.
The Only Certainty? Uncertainty.
Some economists expect 2021 to be an especially volatile year for mortgage rates. As COVID-19 vaccinations become more widely available, economic activity may pick up as well. Generally speaking, an improving economy means higher mortgage rates. Economists and investors think the U.S. economy will rebound in 2021 as COVID-19 vaccines are distributed.
Some economists also predict that 2021 will be a record year for mortgage volume, particularly for new mortgages.
Choose the Perfect Bryan-College Station Community
With all signs pointing toward this being an excellent time to buy a new home, the next step is choosing the community that’s right for you. RNL Homes is currently building in six beautiful Bryan-College Station communities, each with its own unique personality. Home prices start in the $300s.
Communities where we build include:
- Austin’s Colony, from the $310s.
- Greenbrier, from the $300s.
- Miramont, From the $550s.
- Mission Ranch, from the $370s.
- Oakmont, from the $310s.
- Traditions, from the $430s.
Already own land in the area? We also have a “Build on Your Lot” program that brings the quality and beautiful design RNL Homes is known to your own land. You have the option to choose one of our stunning floor plans or provide us with a pre-designed set of plans.
Schedule a Tour or Ask Us a Question
With the safety of both our customers and our team in mind, we’re offering several different ways for you to tour our homes:
Virtually guided tour: Tour our model home with a virtual guide. Our sales professional will be there virtually via Google Home and a dedicated flat screen to guide you and answer any questions.
Live video tour: Explore our homes from the comfort of your couch. Our sales professional will walk you through our model home and answer your questions as you watch from your preferred smart device.
Our model homes are completely sanitized between each onsite visit.
To set up a tour with a virtual guide, call us at 979-977-5775 or email ariel@rnlhomes.com. To learn more about touring RNL Homes, watch this short video. We look forward to meeting you!