Mortgage August 8, 2024

Mortgage Rates Down From Recent High

Mortgage rates have recently become a major talking point in the housing market due to their significant impact on affordability. If you’re planning to buy a home, you’ve likely been anticipating a drop in rates. Based on recent trends, it looks like your patience might finally pay off.

Mortgage Rates Have Declined in Recent Weeks

There’s significant news regarding mortgage rates. Following the latest economic reports, including inflation, unemployment figures, and the Federal Reserve’s recent remarks, mortgage rates have started to decrease. According to Freddie Mac, they’re now at their lowest level since February. To illustrate this downward trend, take a look at the graph below:

You might be tempted to wait and see if mortgage rates will drop even further. However, it’s important to keep some perspective. The historically low rates seen during the pandemic are long gone. If you’re hoping for a return to 3% mortgage rates, you’re likely holding out for something that experts agree is unlikely to happen. As Greg McBride, Chief Financial Analyst at Bankrate, puts it:

“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%.”

The Connection Between Mortgage Rates and Buyer Demand

If you decide to wait for mortgage rates to decline further, you may face increased competition as other buyers jump back into the market.

There’s usually a link between mortgage rates and buyer demand in the housing market. Typically, when rates are high, buyer demand tends to decrease. However, when rates begin to drop, the dynamic shifts. Buyers who were hesitant due to higher rates often resume their home searches. Here’s what that could mean for you. As a recent article from Bankrate explains:

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.”

Bottom Line

f you’ve been holding off on buying a home, the recent decline in mortgage rates might be the signal you’ve been waiting for. With rates at their lowest in months, now could be the perfect time to re-enter the market before others do the same.

If you’re prepared to begin the process, reach out today and let’s get started.