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Mortgage Rates Keeping You Sidelined?

No one knows for certain if, or when, mortgage loan rates will fall. On any given day, you can find financial experts predicting with certainty rates to fall, rise, and stay the same. The fact is no one knows for sure.

Real estate and mortgage lending professionals yearn for rates at the historic lows experienced in recent years. However, if we take a step back and look at rates over the long term, today’s rates are still close to or below the historic average. Freddie Mac — the main industry source for mortgage rates — has been keeping records since 1971. Between April 1971 and April 2024, 30-year fixed-rate mortgages averaged 7.74%.

While lower rates generally mean lower monthly payments on a similar size loan, there are additional factors you may want to consider.

When mortgage rates begin to drop, lower interest rates will entice first-time buyers and homeowners waiting on the sidelines to reenter the market, creating an increase in demand. This increased demand in a market with tight supply often results in increased home prices.

Additionally, the disproportion of available homes to prospective homebuyers could reignite bidding wars, appraisal gaps and increased offer prices. Finding the right home at a price within your budget can be stressful. Bidding wars, short decision times, and coming up with additional cash to bridge an appraisal gap can make the process even more nerve wracking.

Renters in a financial position to make a purchase could be applying those funds to their mortgage rather than waiting on rates to be most favorable. “Every day spent waiting for rates to drop is a day you’re not building equity in your home,” stated Tricia Depeel, Executive Vice President and Chief Operating Officer at First Western Mortgage. “Homes tend to appreciate over the long-term with fixed principal and interest payments, while rents tend to increase. If you can comfortably afford to do so, purchasing now may have a better return on your investment than waiting for rates to fall.”

The team at First Western Mortgage can help you determine your financial readiness, downpayment options, and other factors unique to your individual needs. “The right time to buy is when you can comfortably afford to do so, and when your home purchase aligns with your goals and values,” Depeel added.

The professionals at First Western Mortgage will make your home buying experience as simple and convenient as possible, with competitive rates, local expertise, and friendly customer service. Give us a call today at 479-845-0972 to speak to one of our mortgage lending professionals.

Equal Housing Lender. Tricia Depeel  NMLS#1309007