Think Twice Before Waiting for 3% Mortgage Rates

Editor — Thu, 19 Jan 2023 17:24:57 +0000

Think Twice Before Waiting for 3% Mortgage Rates

Last year, the Federal Reserve took action to try to bring down inflation. In response to those efforts, mortgage rates jumped up rapidly from the record lows we saw in 2021, peaking at just over 7% last October. Hopeful buyers experienced a hit to their purchasing power as a result, and some decided to press pause on their plans.

Today, the rate of inflation is starting to drop. And as a result, mortgage rates have dipped below last year’s peak. Sam Khater, Chief Economist at Freddie Mac, shares:

“While mortgage market activity has significantly shrunk over the last year, inflationary pressures are easing and should lead to lower mortgage rates in 2023.”

That’s potentially great news if you’re a buyer aiming to jump back into the housing market. Any drop in mortgage rates helps boost your purchasing power by bringing down your expected monthly mortgage payment. This means the lower mortgage rates experts forecast this year could be just what you need to reignite your homebuying goals.

While this opens up a window of opportunity for you, remember: you shouldn’t expect rates to drop back down to record lows like we saw in 2021. Experts agree that’s not the range buyers should bank on. Greg McBride, Chief Financial Analyst at Bankrate, explains:

“I think we could be surprised at how much mortgage rates pull back this year. But we’re not going back to 3 percent anytime soon, because inflation is not going back to 2 percent anytime soon.”

It’s important to have a realistic vision for what you can expect this year, and that’s where the advice of expert real estate advisors is critical. You may be surprised by the impact even a mild drop in mortgage rates has on your budget. If you’re ready to buy a home now, today’s market presents the opportunity to get a more affordable mortgage rate, find your dream home, and face less competition from other buyers.

Bottom Line

The recent pullback in mortgage rates is great news – but if you’re ready to buy now, holding out for 3% is a mistake. Work with a local lender to learn how today’s rates impact your goals, and let’s connect to explore your options in our area.

3 tips for making the most out of your mortgage

Webmaster — Fri, 16 Mar 2018 01:21:43 +0000

Here are some excellent tips on making the most out of your mortgage:
1. Don’t rush to pay off your mortgage – Interest rates in 2018 are sure to rise. A quarter-point hike will increase the APR on your credit card, auto loan, etc… that has a variable interest rate. Tackle your most expensive debt first.

“Don’t rush to pay down or pay off your low-rate, tax-deductible fixed-rate mortgage. Use the cash instead to pay off other higher-cost debt, or max out your tax-advantaged retirement savings accounts, like an IRA or 401(k),” says Greg McBride, CFA, chief financial analyst for Bankrate.com.

2. If you have an adjustable-rate mortgage consider refinancing to a fixed-rate loan – With rates expected to rise, it’s likely that you will be paying more when your rate term is up. There are predictions that mortgage rates will rise to 5% in 2018 and could exceed that by 2019.

3. Do not wait it out for a price drop on the dream house you want – NAR expects prices to steadily increase throughout the year. The number of available houses for sale is at it’s lowest inventory since it began being tracked in 1999. Home scarcity, with high demand, equals higher prices. If you wait, you’re in danger of losing out to someone else.

mortgage – McVeigh Properties

Think Twice Before Waiting for 3% Mortgage Rates