Experts weigh in on whether buyers should take advantage of new rates.
For potential homebuyers, this means a slightly more affordable housing market with increased buying power.
How Big Is the Mortgage Drop?
Credit:Thomas J. Story
A brief history is necessary to appreciate the decrease in mortgage rates.
Before the pandemic, mortgage rates hovered at 5% on average.
During and after lockdown,Americans increasingly sought bigger living spacesafter feeling cooped up for months.
Many also shifted to remote work, which requiresmore home office space.
As a result, the housing market began to favor sellers with high home prices and low inventory.
Now, with rates dropping, its important to have context.
Instead, he believes the significance of the recent decrease is how it relates to the overall trend.
I think the current rate drop will be part of a slow, long-term trend of declining rates.
Regardless, the downward trend wont likely be smooth even as rates trend lower.
However, these numbers areonly accurate if you pay cash.
While the drops in rates might not be huge, they can have a significant impact on your wallet.
Should You Let Mortgage Rates Dictate Your Home-Buying Plans?
Rates often fluctuate, and waiting for the absolute lowest point could lead to missed opportunities.
There are so many factors to consider beyond the macroeconomic picture, Nicastro says.
In short, dont buy a house now just because youre worried rates might go up.
Trying to predict the future is both stressful and ill-advised.
