This is a welcome bit of relief: Over the past two months, mortgage rates, which had been climbing steadily for over a year, started to trend down.
In fact, the 30-year fixed mortgage rate has dropped to around 4.45% from a high of 4.94%. For reference, that’s the lowest level since April of last year.
What’s behind this welcome change?
Well, there’s been a lot of volatility in the stock market since November. This pushes investors into more predictable investments, such as bonds. And this, in turn, pushes bond rates down.
Mortgage rates tend to follow bond rates pretty closely, and that’s why we’re seeing the 0.5% drop in mortgage rates since last November.
This is certainly good news for the real estate market as a whole, but how does it affect you in particular?
Well, if you’re looking to buy, it makes it a lot easier to afford a loan.
Imagine, for example, that you wanted to take out a 30-year mortgage for $200,000.
The current 0.5% drop in mortgage rates would mean you’d be paying around $100 less each month.
And over the lifetime of the mortgage, you would pay around $20,000 less altogether.
Those are pretty sizeable numbers, and they clearly show that it makes sense to take advantage of the current low mortgage rate.
And that’s not the only good news if you’re thinking of buying: Several beautiful homes have just come on our local market.
If you want to check them out, take a look at this complete listing of available homes:
What if you’re looking to sell?
In that case, the current low mortgage rates benefit you in two ways.
First, if you’re also looking to buy a new home after you sell, the present dip in mortgage rates means you won’t be “locked in” to your current low mortgage.
Second, lower mortgage rates also make home buying more affordable, which increases demand for your home.
This helps you sell quickly and at a better price.
Speaking of—do you know what your home is worth in the current market?
In case you want to get a good idea, try out this home value calculator, which takes into account recent sales in our area:
And finally, whether you’re looking to buy or sell, the current low mortgage rates mean that the time to act is now.
It’s likely that mortgage rates will start increasing again soon, as they did for much of last year. That means that the opportune moment we’re seeing now will be gone, both for buyers and sellers.
If you’re ready to get the ball rolling, or if you have any questions about your particular situation, give us a call. We’re here to help.