Key trends influencing mortgage rates

Navigating the world of mortgages can be challenging, especially with the ever-changing housing market.

As of this month, several key trends are influencing mortgage rates and the overall market landscape. Here's what you need to know:​

Current mortgage rates

Mortgage rates have experienced fluctuations over the past few years. After reaching record lows in 2021, rates began to climb, peaking in the high 7% range in 2023. As of now, the average rate for a 30-year fixed mortgage stands in the high 6% range. While this is a decrease from the highs of 2023, it remains significantly higher than the rates seen during the early 2020s.​

Home prices and inventory

The pandemic has had a lasting impact on home prices. Since 2020, median home prices have risen by about 45%, reaching a national average of $418,000 in January 2025. This surge is attributed to factors such as low borrowing costs in the early 2020s and increased demand driven by remote work opportunities.​

However, the market is showing signs of stabilization. The number of homes for sale is projected to increase by 11.7% this year, providing more options for prospective buyers. This increase in inventory could lead to a more balanced market, with home prices stabilizing after years of rapid growth.​

Tips for prospective homebuyers

• Understand your budget: Before diving into the housing market, assess your financial situation. Consider factors like your income, existing debts, and how much you can afford for a down payment. Utilizing online mortgage calculators can provide a clearer picture of what you can afford.​

• Check your credit score: A higher credit score can qualify you for better mortgage rates. Review your credit report for any discrepancies and take steps to improve your score, such as paying down debts and avoiding new credit inquiries.​

• Explore mortgage options: Various mortgage products are available, each with its own set of requirements.

• Get prequalified: A prequalification not only clarifies your budget but also shows sellers that you're a serious buyer. This step can give you an edge in competitive markets

• Stay informed about market trends: The housing market is influenced by various factors, including economic indicators and policy changes. Keeping abreast of these trends can help you make informed decisions about when and where to buy.​

Local insights

For residents of Itasca, Roselle, Schaumburg and the surrounding areas, the local housing market has mirrored national trends. Home prices have appreciated over the past few years, and inventory has been limited. However, with the anticipated increase in listings this year, buyers may find more opportunities to purchase homes that fit their needs and budgets.​

ItascaBank.com/mortgages

The mortgage landscape has evolved significantly over the past few years, so prospective homebuyers will want to stay informed and prepared.

At Itasca Bank & Trust Co., we understand current market trends. We can help you assess your personal financial readiness, and together we will explore various mortgage options.

We work with Rocket, the largest mortgage lender in the U.S. to help you get the most out of your mortgage. Rocket also can be instrumental when it comes to first-time homebuyers who need flexibility on a down payment.

Give us a call at (630) 773-0350 to talk about your next mortgage, HELOC or refinancing needs. At Itasca Bank & Trust Co., we believe in making mortgages simple so you can focus on what truly matters: enjoying your new home. Let’s get started today.

• Mike Pallares is vice president of Itasca Bank & Trust Co.