Highlights:
- If you want to beat the competition, now is the perfect time to buy a home.
- The average daily mortgage rate hit a 14-month low of 6.34% on Monday, giving buyers thousands of dollars in purchasing power.
- Don’t wait to buy: Buyers who have been scared off by high interest rates are ready to enter the market, which could drive prices up.
- Total listings are also up 20% from last year, meaning there’s plenty of inventory to choose from.
On Monday, August 5, the average daily interest rate on a 30-year fixed mortgage plummeted to 6.34%, the lowest level since April 2023. Other loan products fell in the high 5% to mid 6% range. Surprisingly weak jobs report Growing fears of an impending economic recession Global market slowdown.
continue Chain of eventsOn August 6, it rose to 6.52%, higher than the low on Monday but well below the April peak of 7.5%. In fact, homebuyers today Approximately $30,000 Purchasing power has increased (by about $200 per month) since the beginning of July, and many experts are predicting that the Fed will start cutting interest rates. more than I thought Mortgage rates could fall further in September.
With more sellers entering the market, the total number of listings is also up 20% from last year. The market seems to be opening up to buyers, so potential buyers may be wondering, “Should I buy a home now or wait?”
Is now a good time to buy a house?
The short answer is, yes, if you have the funds, it’s a good time to buy a home before the market catches up with you.Waiting for interest rates to fall further risks increasing competition among buyers and causing sellers to raise prices.
Buying a home now means maximizing the potential of your investment. Lower interest rates mean you can save money over the life of your loan, meaning you can save more money. Mortgage payments It can help build equity.
It is noteworthy that the market chaos But that hasn’t been the case recently. For example, rising mortgage rates typically push down home prices, but over the past two years they’ve had the opposite effect. And while lower inventory usually means more competition, prices are too high for many buyers, leaving some homes unsold while others sell within days.
Additionally, economists are not optimistic about what mortgage rates will be like in the coming months, and home prices remain All-time highAlthough the week started with good news, it’s important to prepare for any surprises that may come your way.
Will mortgage rates fall further in 2024?
Today’s mortgage rates reflect how investors expect the Fed to act. Investors believe the Fed is done suppressing inflation. Expect a gradual decrease Mortgage interest rates through the end of the year.
In other words, economists don’t expect mortgage rates to fall much further because current rates already factor in expected rate cuts in September.
How did we get here?
Over the past decade, the housing shortage has worsened. Part of the cause The housing boom of 2021-2022. The tight supply of homes has resulted in many buyers competing for positions. Price hikeRecord-low mortgage rates also fueled the frenzy. Chronic underbuilding Number of homes since the 1980s.
However, in 2023 and 2024, Construction industry recovers And the stock started Slowly recoveringPrices continued to rise even as mortgage rates remained high. When interest rates rise, demand and prices typically fall. But that didn’t happen, as many homeowners were unwilling to give up pandemic-era interest rates, which led to an even greater shortage of homes for sale.
this is Unique trends This continues to happen today. The national median selling price is June record high And many people still Avoid the market Overall, people who are buying are often doing so in affordable places like: Texas and Upstate New YorkInventories are increasing, Low sales Home prices across the country are hitting record highs; Small sign To fall.
However, recent declines in mortgage rates are giving homebuyers great hope.
Home sellers need to prepare for competition
The recent decline in mortgage rates has created an environment for more buyers to enter the market, increasing competition for properties.
This is because home buyers are scared of high mortgage interest rates. Stand by and wait Especially as inventory has been sluggish for years as sellers want to hold on to pandemic-era prices.Lock-in effect). With interest rates dropping, more buyers will feel they have the budget to purchase a home.
Should I lock in my mortgage rate now?
If you can afford it, now is the perfect time Lock in a low mortgage rateIt’s the first time interest rates have been this low in over a year.
A lower interest rate means you can get a bigger loan or lower payments within your current budget. If you still feel like your interest rate is too high, Lower mortgage interest ratestoo.
All cash buyer Those hoping to avoid mortgages altogether should also act now to avoid possible price increases as interest rates continue to fall.
Final thoughts
If you are Looking for a house If you’ve been scared off by high interest rates, now is your chance Connect with an agent Start your home search. Interest rates are expected to continue to decline slowly, and the market is Gaining momentumThe longer you wait, the more competition there will be.
