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Mortgage rates continued to drop this week, ending below 6.5% for a 30-year fixed conventional loan. FHA and VA rates also dipped below 6%!
Everything is aligning for lower rates in the coming months and into 2025. The Fed is expected to announce at least a 0.25% rate cut at their September 18th meeting, which could be just the beginning!
Wall Street anticipates more cuts to follow. The market currently predicts a 73% chance of a 1% reduction in the Fed Funds rate by the end of the year, and an additional 1.25% cut in 2025. This would amount to a total drop of 2.25%.
How will this impact mortgage rates? We could see mortgage rates drop into the low to mid-5% range by the end of next year, with FHA and VA rates potentially dipping into the high 4% range.
What does this mean for homebuyers? Increased competition. For example, on a $450,000 loan at the current rate of 6.5%, the principal and interest payment is $2,844. If rates drop to 5.25%, the payment decreases to $2,484, saving $360 per month.
A homebuyer today who can afford a $2,844 principal and interest payment would be able to increase their loan amount from $450,000 to $515,000. Does this mean home values will increase by $65,000? Not necessarily, but the influx of buyers will increase competition, and many may be willing to pay a bit more to secure a home.
The optimal window for a buyer to secure a reasonably priced home could be now. The math is in your favor. If you are on the fence about purchasing a home, we can provide straightforward numbers to help you make an informed decision.
If you’ve been wanting to sell your home, now could be a great time to act. We've had several clients recently who were selling their homes and using the equity for their next purchase.
Don’t miss the train. Get on board to homeownership before the train is packed with buyers once interest rates drop further. Now’s the time!
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The information contained is the viewpoint of the presenter(s). Individuals should consult their own financial representative.
Estimated Mortgage Payment is for exemplary purposes only. Contact a licensed loan officer for exact numbers and APR. Additional rates and terms may apply and are subject to change without notice. Loan scenario assumes a purchase price of Zillow's list price and a 10% down payment. Points and fees not included. Property tax, homeowners insurance, mortgage insurance, and HOA fees are approximate and may vary. Other fees may apply. Product displayed is a conventional 30-year fixed rate mortgage using the current average rate as shown on Mortgage News Daily (mortgagenewsdaily.com).
Estimated Qualifying Income assumes a homebuyer has a FICO score above 740, no other credit debt, and a debt-to-income (DTI) ratio of 43%.
For exact numbers and APR or to run a loan scenario based on your own credit and income, contact our office at (858) 259-8700.
Rate Source: Mortgage News Daily. Rates displayed are approximate, subject to change, and do not necessarily reflect rates available to you. MND’s methods involve an objective component based on lenders' raw prices as well as a subjective impression from their network of originators. For more information about how these rates are calculated, visit www.mortgagenewsdaily.com/mortgage-rates/about.
Mortgage News Daily (MND) is a trademark of Brown House Media, Inc. Zillow is a trademark of Zillow, Inc. CrossCountry Mortgage has not been authorized, sponsored, or otherwise approved by Brown House Media, Inc. or Zillow, Inc.
Equal Housing Opportunity. All loans subject to underwriting approval. Certain restrictions apply. Call (858) 259-8700 for details. All borrowers must meet minimum credit score, loan-to-value, debt-to-income, and other requirements to qualify for any mortgage program. CrossCountry Mortgage, LLC is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the federal government. CrossCountry Mortgage, LLC is not affiliated with or acting on behalf of or at the direction of the Veteran Affairs Office or any government agency. Certificate of Eligibility required for VA loans. By refinancing, the existing loan total finance charges may be higher over the life of the loan.
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