What Lower Mortgage Rates Mean for Your Purchasing Power
If you’re considering purchasing a home, understanding the influence of mortgage rates on your affordability and monthly payments is crucial. Luckily, 30-year fixed mortgage rates have experienced a notable decrease since the conclusion of October and are presently below 7%, as reported by Freddie Mac (see graph below):
This recent trend is great news for buyers. As a recent article from Bankrate says:
“The rate cool-off somewhat eases the housing affordability squeeze.”
And according to Edward Seiler, AVP of Housing Economics and Executive Director of the Research Institute for Housing America at the Mortgage Bankers Association (MBA):
“MBA expects that affordability conditions will continue to improve as mortgage rates decline . . .”
Here’s a bit more context on how this could help with your plans to buy a home.
How Mortgage Rates Affect Your Search for a Home
Recognizing the correlation between mortgage rates and your monthly housing expenses is essential in achieving your goal of homeownership. The accompanying chart visually demonstrates the fluctuations in your ability to afford a home as mortgage rates change. Consider a scenario where your budget permits a monthly payment ranging from $2,400 to $2,500; the chart’s green section illustrates payments within or below that specified range (see chart below):
As you can see, even small changes in rates can affect your budget and the loan amount you can afford.
Get Help from Reliable Experts To Understand Your Budget and Plan Ahead
When considering a home purchase, seeking advice from a local real estate agent and a reliable lender is crucial. They can assist you in examining various mortgage possibilities, comprehending the factors influencing the fluctuation of mortgage rates, and clarifying the repercussions of these changes on your situation.
By collectively analyzing the figures and the most recent data, and subsequently adapting your approach in response to current rates, you will enhance your preparedness and readiness to embark on the journey of home buying.
Bottom Line
If you’re looking to buy a home, you should know the recent downward trend in mortgage rates is good news for your move. Let’s connect and plan your next steps.
