Think Twice Before Waiting for 3% Mortgage Rates

Over the past year, the Federal Reserve has taken action to keep inflation in check. In response to these efforts, mortgage rates jumped up from record lows in 2021, peaking at just over 7% last October. Buyers, who expected lower purchasing power as a result, decided to put their plans on hold.

Inflation is starting to fall today. As a result, mortgage rates are below last year’s peak. Freddie Mac Chief Economist Sam Cater said:

“While mortgage market activity has significantly shrunk over the last year, inflationary pressures are easing and should lead to lower mortgage rates in 2023.”

This could be great news for buyers looking to re-enter the housing market. Lower mortgage rates help strengthen purchasing power by lowering expected monthly mortgage payments. This means that this year’s drop in mortgage rates, according to experts, may be just what it takes to reinvigorate homebuying goals.This gives you an opportunity, but remember:

Don’t expect interest rates to return to record lows like we’ve seen in 2021. Experts agree that this is not a range that buyers should bet on. Greg McBride, Chief Financial Analyst at Bankrate, explains:

“I think we could be surprised at how much mortgage rates pull back this year. But we’re not going back to 3 percent anytime soon, because inflation is not going back to 2 percent anytime soon.

It’s important to have a realistic idea of ​​what to expect this year, and advice from an experienced real estate advisor is key. You’d be surprised at how even a small drop in mortgage rates can impact your budget. If you’re ready to buy a home today, today’s market offers opportunities to get cheaper mortgage rates, find your dream home, and face competition from other buyers.

Bottom Line

The recent drop in mortgage rates is good news, but waiting for 3% is a mistake if you’re ready to buy now. Work with a local lender to learn how today’s interest rates affect your goals, connect with us and explore your opportunities in our area.

Find out why Kaya Homes is the leader in Long Island Real Estate and are your go-to realtor in the Lynbrook, Oceanside, Malverne, Hewlett, Valley Stream, East Rockaway, Woodmere, Cedarhurst, Baldwin, North Woodmere, Woodsburgh, Hewlett Neck Hewlett Harbor, Bellmore,Wantagh,Merrick and Freeport area. https://www.kayahomesny.com/.

 

Fri, 27 Jan 2023 21:51:34 +0000

Accessibility Toolbar

Scroll to Top