Since the beginning of the year, the 30-year fixed mortgage rate has fallen from 4.3 percent to 3.8 percent. Although a half point may not seem notable, it can translate to significant savings on a monthly basis over the life of a loan. A recent article, Half-Point Drop in Interest Rates Boosts Buyers’ Budgets, tells buyers that they should take a second look at their housing buget.
Mortgage rates have dropped so much this year that a buyer who started shopping at the beginning of the year for a $375,000 house could buy a $400,000 house now for the same monthly payment.
Despite industry-wide forecasts that mortgage rates would climb to near 5 percent by the end of the year, they have dropped to levels the market hasn’t seen since 2012. The dip gives consumers more purchasing power, with more inventory and slowing home value appreciation.
If you started shopping for a home loan a few months ago, you should run your affordability numbers again before continuing your home search.
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