Mortgage rates have been a major talking point in the housing market lately, largely due to their impact on affordability. If you’ve been considering a move, you’ve likely been hoping for rates to decrease to make homeownership more attainable. The good news? Recent trends suggest your wish may be coming true.
Mortgage Rates Decline in Recent Weeks
There’s significant news about mortgage rates. After the latest updates on the economy, inflation, unemployment, and comments from the Federal Reserve, mortgage rates have begun to dip. According to Freddie Mac, rates are now at their lowest level since February. The downward trend is evident in the latest data, as shown in the graph below:
You might be wondering if you should wait and see if rates drop even further. But it’s important to keep things in perspective. The historically low rates seen during the pandemic are unlikely to return. If you’re holding out for a 3% mortgage rate, experts agree that’s not realistic. Greg McBride, Chief Financial Analyst at Bankrate, explains:
“The hopes for lower interest rates need the reality check that ‘lower’ doesn’t mean we’re going back to 3% mortgage rates. . . the best we may be able to hope for over the next year is 5.5 to 6%.”
With the recent decrease in rates, you have a great opportunity in front of you. It might be the perfect time to jump back into the market.
How Rates Impact Buyer Demand
If you decide to wait for rates to drop further, you could end up facing more competition as other buyers resume their home searches too.
In the housing market, mortgage rates and buyer demand are often linked. Typically, higher rates reduce buyer demand, but when rates start to fall, more buyers are motivated to return to the market. As a recent article from Bankrate notes:
“If you’re ready to buy, now might be the time to strike. Home prices have been rising primarily because of a longstanding shortage of homes for sale. That’s unlikely to change, and if mortgage rates do fall below 6%, it’s possible buyers would enter the market en masse, further pushing up prices and resurrecting bidding wars.”
If you’ve been waiting for the right moment to make your move, the recent drop in mortgage rates might be just what you’ve been waiting for. With rates at their lowest point in months, now could be the ideal time to act before the market heats up again.
If you’re ready to start the process, reach out to a member of our team to get things underway.