When contemplating whether or not to buy a home in any given area, you’re going to either pay for the home in cash, or you’re going to be looking at mortgage rates in the state where you’re considering buying. Making sure that you can manage the current mortgage rates, and ensuring that you’re not signing a mortgage right before rates drop, is just as important as checking up on a neighborhood, taking a tour of the house and ensuring that the home is worth what you’re paying for it. New Mexico mortgage rates do tend to be a little more stable than in many other states, but that doesn’t mean that they never fluctuate, only that they scarcely fluctuate quite so dramatically as rates in, say, California or New York.
Here are the general mortgage rate averages in New Mexico according to Bankrate.com.
- 30 year fixed mortgage- 3.54%
- 15 year fixed mortgage – 2.77%
- 5/1 ARM – 2.95%
- 30 year fixed mortgage refinance – 3.57%
- 15 year fixed mortgage refinance – 2.84%
- 7/1 ARM refinance – 3.06%
- 15 year jumbo fixed mortgage refinance – 3.39%
These are a little bit lower than the national averages. For instance, a 30 year fixed mortgage on average is around 3.875, while a 15 year fixed mortgage is 3.125%. Housing costs tend to be lower in New Mexico, so you’re going to be paying less each month in the Land of Enchantment than in most states, but the rates themselves aren’t significantly lower.
Note that these are up-to-the-minute numbers as of the time of this writing (February 8, 2016). You will want to check a site like Bankrate.com for yourself before making a decision to buy a home. In fact, by comparing these numbers to current rates, you will be able to measure market trends for yourself and make a fair estimate of whether they are rising or falling.
Rates have generally been falling at a modest rate in New Mexico over the last week. 30 year fixed rates are down 0.10 from 3.64 this time last week, while 7/1 ARM refinances saw a much more modest 0.01 drop. 15 year fixed mortgages actually saw a jump of 0.05. You’ll find with a little bit of tracking that mortgage rate trends are rarely uniform across all types of loans.
The general trend since the start of the year has been a very gradual decline in rates. 30 year fixed rates were closer to 4.00 a month ago, and they’re closer to 3.50 today. This is a fairly marginal decline, but we’re only a month into 2016 as of the time of this writing. It remains to be seen how far this downward trend is going to continue, but the safest bet may be to assume that these rates are going to continue dropping over the course of the year, but will stabilize before falling too far below the national average.
This estimate is based on New Mexico’s slow population growth. Between 2010 and 2015, the state’s population grew only 1.5%. According to census data compiled by Research & Polling Inc. Meanwhile, Arizona and Texas grew 7% and 9% respectively. In those five years, the population shifted by 27,000 people moving out of New Mexico. New Mexico’s 1.5% population growth owes entirely to birth rates, with 53,000 people having been born in the state.
In short: Supply is higher than demand right now. The 1.5% growth is comprised entirely of people who are far too young to be buying their first home.
This population shift may owe to the recovering American economy. The state saw more significant population growth from 1.82 million in 2000 to 1.9 million by 2010, or about 4%, perhaps thanks in part to the great recession and the mortgage crisis, coupled with affordable housing New Mexico. Now that the economy is recovering, many who moved to New Mexico to escape a higher cost of living are again able to afford to live somewhere else.
In other words, while the slow population growth may not be the best news for the New Mexico economy in general, it can work to the advantage of those who simply want to live in New Mexico and would like to buy a home for a low price.
Looking Forward
The safest assumption that one can make about the future of the real estate market in New Mexico? That it’s pretty easy to make safe assumptions. The market in the Land of Enchantment doesn’t fluctuate dramatically overnight. Trends are slow to develop, taking years to see the same change you might see in a month in any other state.
So the short answer is: Expect to see a small decline in mortgage rates continuing over the course of the next year as banks try to attract more borrowers.
With the next presidential election looming on the horizon, New Mexico may yet see another significant growth in population. Even if our next president does a fine job of continuing the work that Barack Obama has done to repair the economy, uncertainty surrounding a new commander in chief may lead to greater population growth. The general trend right now is towards cheaper housing and lower mortgage rates, but there’s no telling how long that will last. In summary, this is a very good time to buy a home in New Mexico, this time next year might be even better, but you might not want to wait any longer than that.
2 Point Highlight
New Mexico’s 1.5% population growth owes entirely to birth rates, with 53,000 people having been born in the state.
While the slow population growth may not be the best news for the New Mexico economy in general, it can work to the advantage of those who simply want to live in New Mexico and would like to buy a home for a low price.
