Rates Dropping - What does this mean for you?

This past Thursday, it came out that rates have dropped to their lowest levels since April of 2022 to 6.2% for a 30 year mortgage. While not in the 2-3% range, rates are still lower than where they were at a year ago. To put this in perspective, we were at rates of 7.8% in October of last year.

The FED has been keeping rates high to get inflation under control (we all feel that one at the grocery store for sure).

What does this mean for you if you are purchasing a home? Well, especially if the last time you were in the market actively searching, your affordability could have increased. This means that because rates are down a little bit, that you can actually increase your purchase price for the same payment that you are comfortable with.

While this is great, typically when we start to see rates falling, we also tend to see more buyers in the market, so if this does continue to happen throughout the next few months, you can expect more competition in the market searching for homes. This can mean multiple offers on homes, homes going at or above asking price and the affordability to change slightly if you have to go over asking.

If the FED does cut the rate next week, we may or may not see a reflection in the mortgage interest rate, as some of the changes are already happening with the drops over the last two weeks.

Now, if you are selling a home, this could mean a wonderful fall market with many buyers out who have been waiting on the sidelines. This is great for you if you are selling, as it could mean multiple offers and going at or above asking with terms that are favorable to you.

Either way, whether you have been thinking of buying, or selling, timing the market is nearly impossible, so if you are on the hunt for the next pefect house, get your finances in order and simply pull the trigger to make the change. You’ll avoid more buyers in the market if rates decrease and your looking to purchase, and if you are looking to sell, you’ll still make great profit and may even sell quickly and for over asking if you price properly to begin with.

What are your thoughts on the recent rate drops?