Mortgage Rates Dip Below 7% for the First Time in Over a Month
Are you in the market for a new home and keeping an eye on mortgage rates? After weeks of increases, rates have finally dipped slightly, but they are still relatively high. The 30-year fixed rate is hovering just below 7%, so if you’re waiting for a significant drop before making a move, you might be waiting a while.
The Federal Reserve announced that they are keeping the federal funds rate unchanged for now, with experts predicting a rate cut later this year, likely in September or later. While economists originally expected three rate cuts in 2024, the timeline has shifted, and people may only see two decreases.
If you are ready to buy a house now, it may not be necessary to wait for rates to drop before starting the process. While national averages are ticking down, it could take months before any significant changes are seen. The current national average for a 30-year fixed mortgage is 6.94%, down from last week’s 7.02%, while the 15-year fixed rate is 6.24%, a decrease from 6.28% the previous week.
When deciding between a 30-year and 15-year fixed mortgage, consider your short-term and long-term financial goals. A 15-year mortgage typically comes with a lower interest rate, allowing you to pay off the loan sooner and save on interest over time. However, your monthly payments will be higher compared to a 30-year term.
If you’re looking to secure a low mortgage rate, focus on improving your credit score, lowering your debt-to-income ratio, and saving for a higher down payment. Waiting for rates to drop significantly may not be the best approach, especially if you are ready to buy now.
When choosing a mortgage lender, don’t just compare interest rates. Look at the mortgage annual percentage rate (APR), which factors in the interest rate, discount points, and fees. Applying for preapproval with multiple lenders within a short time frame will give you the most accurate comparisons and have minimal impact on your credit score.
Overall, staying informed about current mortgage rates and taking proactive steps to improve your financial profile can help you secure the best possible rate for your home purchase.
