Mortgage Rates Pulled Back Will That Continue In 2019?

Real Estate Agent with Fairfax Realty

Mortgage rates have dropped but are they here to stay in 2019 where are rates heading Dave Martin Realty Group Northern Virginia Realtor


Mortgage rates have dipped recently but will that trend continue into 2019? Should home buyers and sellers take advantage of the recent drop or should they sit on the sidelines and wait? Additionally home prices are expected to rise but not as fast as they did in 2018.

Northern Virginia home buyers and sellers have been basking for years in historically low mortgage rates. In recent years, however, rates have been going up and down a bit like a roller-coaster ride — but with the general direction of the interest rate continuing its climb upwards.

Where the interest rates are and where they are likely to go is important to the overall health of the real estate market for both home sellers and home buyers. Often we will hear that mortgage rates are up by X percent or down by Y percent, but when most people hear that information it isn't very meaningful. After all, if rates go up or down by say 1/2 percent, that sounds as though it can't actually mean very much, right? Well, actually, even a 0.5% change will have a significant impact on your monthly Principal and Interest (P&I) payment.

Mortgage Interest Rates Even small changes have a big change to your monthly house payment Dave Martin Realty Group Northern Virginia Realtor

Small changes in interest rates have big changes to monthly mortgage payments Northern Virginia Home Seller Home BuyerSuppose you have just purchased a new house in Fairfax County and your mortgage (That is the amount of money you have borrowed to buy the house.) is $400,000 - GREAT Homes For Sale in Fairfax - and your interest rate is 4.5%  Your monthly P&I (Principal & Interest) payment will be approximately $2027 (see chart above). If your interest rate was just 1/2 a percent higher your monthly P&I jumps by about $120 per month. That's about 6% more per month for the same loan amount. For your monthly P&I to jump up by $120.00 without an increase in interest rates you would need to borrow nearly an additional $24,000. So, as you can see, even a tiny move in the mortgage interest rate can have substantial impact.

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The 30-year fixed rate mortgage rate climbed consistently throughout 2018 until the middle of November. After that point, rates returned to levels that we saw in August — to close out the year at 4.55%, according to Freddie Mac’s Primary Mortgage Market Survey.

After the first week of 2019, rates have continued their downward trend. As Freddie Mac’s Chief Economist Sam Khater notes, this is great news for homebuyers.  He states,

“Mortgage rates declined to start the new year with the 30-year fixed-rate mortgage dipping to 4.51 percent. Low mortgage rates combined with decelerating home price growth should get prospective homebuyers excited to buy.”

In some areas of the country, including the Northern Virginia D.C. Metro Areas, the combination of rising interest rates and rising home prices had made some first-time buyers push pause on their home searches. But with more inventory coming to market, continued price growth, and interest rates slowing, this is a great time to get back in the market!



House values of my Northern Virginia Townhouse

Will This Trend Continue?

According to the latest forecasts from Fannie Mae, the Mortgage Bankers Association, and the National Association of Realtors, mortgage rates will increase over the course of 2019, but not at the same pace they did in 2018. You can see the forecasts broken down by quarter below.

Recent drop in mortgage rates are they here to stay in 2019 Dave Martin Realty Group Northern Virginia RealtorRecent Dip in Mortgage Rates are they here to stay? Should you act now as a home buyer or home seller in Northern Virginia

What Should You Do Now?
It's that time of year that many of us have made some resolutions and set some goals for the year. If Selling or Buying a home was on your short list of things to do in 2019, let's get together and look at your options and plan a strategy that will work best for you. There is a PHONE and EMAIL contact at the bottom of this post. You can also look for homes for sale throughout Northern Virginia also near the bottom of this post.

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"Drop In Mortgage Interest Rates Here To Stay?"
is brought to you courtesy of  Dave Martin Realty Group, your Northern Virginia residential real estate experts. If you're considering selling or buying a house in the Northern Virginia metro area, we'd love an opportunity to earn your business, provide you an outstanding experience, and demonstrate to you that:

"Help From The Best Agent Makes All The Difference."


Dave Martin

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