If you’re thinking about a new home, you want to know that buying a home…
Mortgage Rates Are Dropping. What Does That Mean for You?
Mortgage rates have been a hot topic in the housing market over the past 12 months. Compared to this time last year, rates have risen dramatically. With mortgage rates dropping, which has to do with everything happening in the economy, you may have more options available to you when you’re ready to buy a home.
Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), explains it well by saying:
Mortgage rates dropped even further [recently] as two main factors affecting today’s mortgage market became more favorable. Inflation continued to ease while the Federal Reserve switched to a smaller interest rate hike.”
So, what does that mean for your homeownership plans? As mortgage rates fluctuate, they impact your purchasing power by influencing the cost of buying a home. Even a small dip can help boost your purchasing power. Here’s how it works.
Purchasing Power
The median-priced home according to the National Association of Realtors (NAR) is $379,100. So, let’s assume you want to buy a $400,000 home. If you’re trying to shop at that price point and keep your monthly payment about $2,500-2,600 or below, here’s how your purchasing power can change as mortgage rates move up or down (see chart below). The red shows payments above that threshold and the green indicates a payment within your target range.
This goes to show, even a small quarter-point change in mortgage rates can impact your monthly mortgage payment. That’s why it’s important to work with a trusted mortgage professional who follows what the experts are projecting for mortgage rates for the days, months, and year ahead.
Working with an independent mortgage broker like Troy City Mortgage also means you have access to the most loan options, mortgage rates, and programs. We pull your credit once and do all the shopping for you – accessing hundreds of options to find the perfect mortgage for you. That’s why brokers are better.
Bottom Line
Mortgage rates are likely to fluctuate depending on what happens with inflation moving forward, but they have dropped slightly in recent weeks. If the higher rates had you priced out of the market, contact us today to see what you now qualify for based on the current market conditions. We may be able to get you a rate that is more in line with your goal for a monthly housing expense. We’ll shop hundreds of options until we find the best one for you. Give us a call today and learn why brokers are better!
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