Mortgage Rates Down a Full Percent from Recent High

Mortgage Rates Down a Full Percent from Recent High

Mortgage rates have been a major talking point in the housing market recently due to their effect on affordability. If you're considering a move, you've likely been hoping for rates to decrease. Based on the past few weeks, it looks like that wish may soon be granted.

Mortgage Rates Trend Down in Recent Weeks

There’s significant news regarding mortgage rates. Following the latest economic reports, including those on inflation, the unemployment rate, and recent comments from the Federal Reserve, mortgage rates have begun to decrease. According to Freddie Mac, they are now at a level not seen since February. To illustrate this downward trend, take a look at the graph below:

Maybe you're seeing this and thinking about riding the wave to see how low rates will go. If that's the case, here's an 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%.”

And with the recent decrease, you have a big opportunity right now. It might be enough to make you want to jump back in.

The Relationship Between Rates and Demand 

If you wait for mortgage rates to drop further, you might find yourself dealing with 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 rates are, the lower buyer demand is. But when rates start to come down, things change. Buyers who were on the fence over 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 the push you need. Rates have hit their lowest point in months, giving you a prime 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.