Don’t Wait for 3% Rates
When the Federal Reserve took action last year to try to curb inflation, mortgage rates jumped from the record lows set in 2021 to just over 7%. Many buyers found that their buying power had taken a hit with this hike, and they had to re-evaluate their homebuying plans as a result. This month we are starting to see the rate of inflation drop, and mortgage rates are falling as well. This is fantastic news if you’re a buyer wanting to get back into the house hunt. This drop in mortgage rates increases your buying power by bringing down your expected monthly mortgage payment. Lower mortgage payments could be just what you’re needing to reignite your homebuying excitement. Read on to find out why you don’t want to wait for 3% rates.
Although we are seeing mortgage rates dropping this month, you should not expect to see rates drop back down to the record lows like we saw in 2021. The reason you should not expect to see rates in the 3’s again is because it is unlikely the inflation rate will go back down to 2% anytime in the near future. The Fed’s plan is working according to plan, and the plan was to get the inflation rate back up to a “normal” level. This is why you don’t want to wait for 3% rates – they’re not coming anytime soon.
When gearing up to buy a home, it is important to have a realistic vision for what to expect in the coming year. Even a small drop in mortgage rates could have a big impact on your budget. If you’re ready to purchase, today’s market presents a great opportunity to get a more affordable mortgage rate and face less competition from other buyers. Use our mortgage calculator to see how much home you can afford with today’s mortgage rates.
The recent pullback in mortgage rates is great news – but if you’re ready to buy now, holding out for 3% is a mistake. We can set you up with a local real estate expert who can help you explore the options in your area and learn how today’s rates impact your homebuying goals.