Will Mortgage Rates Continue Their Downward Trajectory?
For the past five weeks, mortgage interest rates have dropped, returning to figures that haven't been seen since August. Any relief from the high rates recently experienced is welcome. With each 1% reduction in mortgage rates, it roughly reduces the monthly mortgage payment by 10%. The chart below shows how purchasing power is impacted by mortgage rates.
Home Buyers Have More Options With Lower Interest Rates
When potential home sellers have great mortgage interest rates, they hesitate to list, even when a different home may be a better option for them at this time in their lives. When the financed cost of a new home would make their monthly payment significantly more, the benefit of a different living arrangement is offset by the monthly cost for these would-be sellers. This has led to a lack of inventory, keeping the price of current listings high. Lower interest rates would greatly benefit the real estate market by leading to more listings with more options for buyers. And those buyers who need to finance would benefit by being better able to afford their new home.
Original blog can be read at Bend Premier Real Estate.