This is a short article making the point that mortgage rates do have a big impact on affordability. But, it also advises us to not let rates keep us from moving forward with our homebuying needs. My personal opinion is that home prices here in Colorado (specifically here in Parker, Colorado) are not going down. I think we might see a spike here in the next few weeks, through the beginning of summer. And, steady to rising values from now on. So, it's probably more important to get into a home today and put an end to prices going up on you. If mortgage rates fall in the future (which they likely will), a mortgage refinance will get you back to market. That's a "win-win". If rates never come down again, or go up, you'll be darn glad you got them in today's market. I have a mortgage lending background, before Cheryl and I started our real estate business. I would love to visit with you about the mortgage market.
How Changing Mortgage Rates Can Affect You
The 30-year fixed mortgage rate has been bouncing between 6% and 7% this year. If you’ve been on the fence about whether to buy a home or not, it’s helpful to know exactly how a 1%, or even a 0.5%, mortgage rate shift affects your purchasing power.
The chart below helps show the general relationship between mortgage rates and a typical monthly mortgage payment:
Even a 0.5% change can have a big impact on your monthly payment. And since rates have been moving between 6% and 7% for a while now, you can see how it impacts your purchasing power as rates go down.
What This Means for You
You may be tempted to put your homebuying plans on hold in hopes that rates will fall. But that can be risky. No one knows for sure where rates will go from here, and trying to time them for your benefit is tough. Lisa Sturtevant, Housing Economist at Bright MLS, explains:
“It is typically a fool’s errand for a homebuyer to try to time rates in this market . . . But volatility in mortgage rates right now can have a real impact on buyers’ monthly payments.”
That’s why it’s critical to lean on your expert real estate advisors to explore your mortgage options, understand what impacts mortgage rates, and plan your homebuying budget around today’s volatility. They’ll also be able to offer advice tailored to your specific situation and goals, so you have what you need to make an informed decision.
Bottom Line
Your ability to buy a home could be impacted by changing mortgage rates. If you’re thinking about making a move, let’s connect so you have a strong plan in place.