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.
“This opportune moment for buyers and sellers will soon be gone.”
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.
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.
In case you want to get a good idea of what your own property may be worth, click here to try out our home value calculator, which takes into account recent area sales.
If you have any other questions, would like more information, or are curious how my team and I can help you take advantage of today’s market conditions, feel free to give us a call or send us an email. We look forward to hearing from you soon.
