The Drop-in Mortgage Rates Brings Good News for Homebuyers

July 11, 2022

The Drop-in Mortgage Rates Brings Good News for Homebuyers
Over the past few weeks, the average 30-year fixed mortgage rate from Freddie Mac fell by half a percent. The drop happened over concerns about a potential recession. And since mortgage rates have risen dramatically this year, homebuyers across the country should see this decline as welcome news.
 
Freddie Mac reports that the average 30-year rate was down to 5.30% from 5.81% two weeks prior (see graph below):
 
 
But why is this recent dip such good news for homebuyers? As Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), explains:
 

“According to Freddie Mac, the 30-year fixed mortgage rate dropped sharply by 40 basis points to 5.3 percent. . . . As a result, home buying is about 5 percent more affordable than a week ago. This translates to about $100 less every month on a mortgage payment.

That’s because when rates go up (as they have for the majority of this year), they impact how much you’ll pay in your monthly mortgage payment, which directly affects how much you can comfortably afford. The inverse is also true. A decrease in mortgage rates means an increase in your purchasing power.
 
The chart below shows how a half-point, or even a quarter-point, change in mortgage rates can impact your monthly payment:
 
 

Bottom Line

 
If your home doesn’t meet your needs, this may be the opportunity you’ve been waiting for. Let’s connect to see how you can benefit from the current drop in mortgage rates.
 
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Center Real Estate, DBA does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Center Real Estate, DBA will not be liable for any loss or damage caused by your reliance on the information or opinions contained here.

Recent Blog Posts

Stay up to date on the latest trends in real estate.

Is Wall Street Buying Up All the Homes in America?

November 27, 2023

f you’re thinking about buying a home, you may find yourself interested in the latest real estate headlines so you can have a pulse on all of the things that could imp… Read more

How VA Loans Can Help Make Homeownership Dreams Come True

November 10, 2023

For more than 79 years, Veterans Affairs (VA) home loans have helped millions of veterans buy their own homes. If you or someone you care about has served in the milit… Read more

Reasons To Sell Your House Before the New Year

November 8, 2023

As the year winds down, you may have decided it's time to make a move and put your house on the market. But should you sell now or wait until January? While it may be … Read more

A Real Estate Agent Helps Take the Fear Out of the Market

October 31, 2023

Do negative headlines and talk on social media have you feeling worried about the housing market? Maybe you’ve even seen or heard something lately that scares you and … Read more

Are Higher Mortgage Rates Here To Stay?

October 16, 2023

Mortgage rates have been back on the rise recently and that’s getting a lot of attention from the press. If you’ve been following the headlines, you may have even seen… Read more

Prepare for Cozy, Budget-Friendly Living Spaces

September 11, 2023

Have you been trying to buy a home, but higher mortgage rates and home prices are limiting your options? If so, here’s some good news – based on what Ali Wolf, Chief E… Read more

Let's Talk

You’ve got questions and we can’t wait to answer them.