Traditionally, VA home loans offer qualifying military and service members a more affordable option for buying a home. In 2020, mortgage rates hit a historic low and remained relatively low for 2021 as well. But in 2022, mortgage rates started going up, raising the cost of buying a home. Now VA borrowers are eager to know, will mortgage rates begin going down anytime soon? Below, we’ve discussed the matter in detail.
Why Did Rates Go Up for VA Home Loans in 2022?
Mortgage rates didn’t go up for one particular reason. Rather, a variety of factors together led to the higher rates that we’re seeing today. This includes economic inflation, economic growth, the federal government’s monetary policies, and the state of the bond and housing markets.
It’s important to keep in mind, however, that while rates right now are slightly higher than they were in the last two years, they’re still fairly low when you look at things from a historical perspective. For example, rates in the 1980s hit a high of 18%. We’re not seeing anything close to that today.
Are VA Mortgage Rates Going Down?
Rates for VA home loans are usually lower than those for conventional mortgages. Still, VA mortgage rates are affected by all the same factors as traditional loans including the state of the housing market and the economy.
In mid-June of 2022, rates were above 6% but in July, things started to change. At the beginning of August, rates went down even further to about 4.5%.
It’s hard to say if this trend will continue in the future. Nothing is certain and only time will tell. All borrowers can do right now is try to make their best judgment and act in a way that makes sense for their individual situations.
How Do VA Rates Compare to Conventional Loans?
It’s important to note that while rates may be slightly higher than what we’ve seen in the past couple of years, qualifying borrowers can still save by going through the VA home loan program. VA rates are still lower than rates for conventional loans.
Right now, conventional loans are sitting at a rate of about 5.3%. That’s a 0.8% difference compared to VA mortgage loans.
Explore Your Options
If you’re interested in learning more about VA home loans or other loan programs, please do not hesitate to contact our office. One of our friendly staff members will be more than happy to assist you.