Mortgage Rates Down a Full Percent from Recent High

Mortgage Rates Down a Full Percent from Recent High

Mortgage rates have been a hot topic in the housing market lately due to their significant impact on affordability. If you're looking to make a move, you've probably been eagerly waiting for rates to come down. Well, if the past few weeks are any indication, you may be getting your wish.

Mortgage Rates Trend Down in Recent Weeks

There's big news for mortgage rates. Recent reports on the economy, inflation, the unemployment rate, and the Federal Reserve's recent comments have led to a slight drop in mortgage rates. According to Freddie Mac, rates are now at a level we haven't seen since February. To illustrate this downward trend, take a look at the graph below:

Maybe you're seeing this and wondering if you should ride the wave and see how low they’ll go. If that’s the case, here’s some important perspective. Remember, the record-low rates from the pandemic are a thing of the past. If you’re holding out hope for a 3% mortgage rate again, you’re waiting for something experts agree won’t happen. As Greg McBride, Chief Financial Analyst at Bankrate, says:

“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 mortgage rates, you have a big opportunity in front of you right now. It may be enough to encourage you to jump back into the market.

The Relationship Between Rates and Demand 

If you wait for mortgage rates to drop further, you might find yourself facing more competition as other buyers re-ignite their home searches too.

In the housing market, there's generally a relationship between mortgage rates and buyer demand. Typically, the higher the rates, the lower the buyer demand. But when rates start to come down, things change. Buyers who were hesitant due to higher rates will resume their searches. Here’s what that means for you. As a recent article from Bankrate says:

“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

If you’ve been waiting to make your move, the recent downward trend in mortgage rates may be enough to get you off the sidelines. Rates have hit their lowest point in months, giving you the opportunity to jump back in before other buyers do too.

If you’re ready and able to start the process, reach out and let’s get started.