This year, the 30-year fixed mortgage rate has fluctuated between 6% and 7%. If you're unsure whether to buy a home, it's important to understand how even a small change in mortgage rates, such as a 1% or 0.5% shift, can impact your ability to purchase a property.
Where do things stand now?
The chart below, courtesy of Keeping Current Matters, helps show the general relationship between mortgage rates and a typical monthly mortgage payment:
A mere 0.5% difference in mortgage rates can significantly affect your monthly payments. Given the current fluctuation of rates between 6% and 7%, it's crucial to consider how these changes impact your purchasing power, particularly when rates decrease.
What does this mean for you?
Are you considering holding off on your homebuying plans in the hopes that mortgage rates will drop? It's a tempting thought, but it's not without risk. Here's why:
The truth is, no one can predict with certainty where mortgage rates will go from here. Trying to time the market to your benefit is a tricky business, even for seasoned investors. It's impossible to know if rates will go up or down, or by how much.
If you're waiting for rates to fall, you could be missing out on a home that fits your budget and lifestyle. Additionally, rates may not drop as much as you expect, or they could rise unexpectedly, making it even more challenging to secure an affordable mortgage.
Lisa Sturtevant, Housing Economist at Bright MLS, explains:
“It is typically a fool’s errand for a homebuyer to try to time rates in this market . . . But volatility in mortgage rates right now can have a real impact on buyers’ monthly payments.”
This is why, when it comes to navigating the volatility of mortgage rates, having expert guidance is crucial. That's where your real estate advisors come in.
By working with a knowledgeable agent and mortgage lender, you can explore your mortgage options, understand the factors that impact rates, and develop a homebuying budget that aligns with your financial goals.
Your advisors can help you stay informed about current market trends and provide advice that's tailored to your specific needs. Whether you're a first-time homebuyer or a seasoned investor, their expertise can help you make informed decisions and avoid costly mistakes.
What's the bottom line?
Your ability to buy could be impacted by changing mortgage rate. Partnering with educated, knowledgable and experiences agents, like those at Heckenberg Realty, will help you put a strong plan in place to make your home buying dreams a reality.