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The spring homebuying season is here, and you may have more opportunity than you think.
Mortgage rates for well-qualified buyers are now around 6.72 percent, the lowest level in four months. FHA and VA loans are even more attractive, currently flirting with the 6 percent mark. There’s a good chance they’ll dip even lower in the near future.
At its latest meeting, the Federal Reserve held interest rates steady, as expected. But there was a key shift in tone:
• The Fed confirmed it’s slowing down monetary tightening
• It’s resuming bond purchases, which helps support lower mortgage rates
• It still expects two rate cuts later this year, despite slightly higher inflation projections
That means policymakers believe current rates are too restrictive. While they’re moving cautiously, they’ve made it clear that cuts are coming.
Right now, the market feels calm, but it may not stay that way for long. If rates continue to inch downward and the media starts covering the shift, more buyers will jump back in. When that happens, competition will increase fast.
If you act now, you could stay ahead of that surge. This is a window of opportunity where sellers are still willing to negotiate, and home prices haven’t started climbing again.
Even with higher mortgage rates, home prices haven’t fallen. That’s because the number of homes for sale hasn’t kept up with demand.
Each year, the U.S. adds about 1.8 million new households, but new home construction is only producing around 1.45 million. On top of that, we’re still making up for years of underbuilding after the Great Recession.
Low inventory means prices are likely to keep rising, especially once more buyers come back into the market.
Homebuilders are thriving. Their market share has nearly doubled, and the reason is simple: they focus on the buyer’s biggest concern: monthly payment.
Instead of lowering prices, they offer financing incentives that reduce the interest rate. This lowers the monthly mortgage payment and makes the home more affordable.
If you’re buying an existing home, you can still access the same kind of savings. Through the Sell Like the Builder program, you can work with a seller who offers a temporary interest rate buydown. In many cases, the seller and lender share the cost of the buydown.
Here’s what a 2-1 buydown looks like on a $500,000 loan:
• Year 1: 4.75 percent interest rate
• Year 2: 5.75 percent
• Year 3 and beyond: 6.75 percent (today’s rate)
• That’s a savings of about $635 per month in the first year alone.
It’s a powerful way to reduce your monthly payment without waiting for rates to drop further.
While others wait for perfect conditions, smart homebuyers are moving now. They’re negotiating with sellers, locking in incentives, and staying ahead of rising competition.
If you’re serious about buying a home, this could be your moment to act.
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.
