Mortgage rates have been one of the hottest topics in the housing market lately due to their impact on affordability. If you've been considering a move, you've probably been watching the rates closely, hoping for a drop. Good news: recent trends suggest that your patience might be paying off.
Mortgage Rates Trend Down in Recent Weeks
There's big news for mortgage rates. Following recent reports on the economy, inflation, the unemployment rate, and the Federal Reserve’s comments, mortgage rates have started to drop. According to Freddie Mac, they're now at a level we haven't seen since February. Check out the graph below to see the downward trend.
You might be wondering if you should wait and see how low rates will go. Here's some important perspective. Remember, the record-low rates from the pandemic are a thing of the past. If you're hoping for a 3% mortgage rate again, experts agree that's unlikely. 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 decrease in recent weeks, you have a significant opportunity right now. It may 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. 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 to The Bobby J Team. Let's get started on finding your dream home in South Walton and surrounding areas!
