In 2021, interest rates dipped to record lows — around 3%. Don’t expect that again.
Last year in response to inflation, the Federal Reserve took action to course correct. In response, interest rates rose rapidly, peaking at just over 7% in October. Many buyers were forced to hit pause on their homeownership dreams. They figured rates may dip to 3% again, so waiting would be best.
Today, it’s true that the inflation rate is dropping. Consequently, mortgage rates have lowered. This is great news if you’re a prospective homebuyer. Lower rates mean greater buying power — more bang for your buck. Your monthly mortgage payment will be less, saving you money.
While it is a good thing that rates are dropping, don’t wait too long to buy in hopes they hit peak lows. Economists widely agree that rates are very unlikely to drop to 3% anytime soon. Greg McBride, chief financial economist at Bankrate, explains,
“We’re not going back to 3% anytime soon because inflation is not going back to 2% anytime soon.”
All this to say, it’s crucial to keep your expectations in check as a buyer. Though rates may not dip as low as the 3% we saw in 2021, even mild drops can have a positive impact on your budget. If you’re looking to own a home this year, the market is much better than it was in the latter half of 2022.
In conclusion, if you’re ready to buy now, experts agree it’s a mistake to hold out for 3% mortgage rates. The best tip we can give you? Work with an experienced agent and mortgage broker who know the market inside and out. Contact Allycyn Bennett at Sandstone Financial today at 949.717.7290 to lock in your interest rate, then connect with your local real estate specialist at SurterreProperties.com.
Source: Keeping CurrentMatters.com
