Mortgage rates are dropping. What does that mean for buyers and sellers in Metro Atlanta and on Lake Lanier?
Mortgage rates have been the talk of the town–over dinner, at the park, and pretty much everywhere you turn over the past 12 months. Compared to rates at the beginning of 2022, rates rose dramatically in the 3rd quarter and into the 4th quarter of 2022. Now they’ve started dropping, thanks to what’s happening in the economy.
Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), explains it simply:
“Mortgage rates dropped even further this week as two main factors affecting today’s mortgage market became more favorable. Inflation continued to ease while the Federal Reserve switched to a smaller interest rate hike. As a result, according to Freddie Mac, the 30-year fixed mortgage rate fell to 6.31% from 6.33% the previous week.”
So, what does that mean for buying a new home? As mortgage rates fluctuate, they impact your purchasing power by influencing the cost of buying a home. Even a small dip can help boost your purchasing power. Here’s how it works:
The median-priced home according to the National Association of Realtors (NAR) is $379,100. So, let’s assume you want to buy a $400,000 home. If you’re trying to shop at that price point and keep your monthly payment about $2,500-2,600 or below, here’s how your purchasing power can change as mortgage rates move up or down (see chart below). The red shows payments above that threshold and the green indicates a payment within your target range.
This goes to show, even a small quarter-point change in mortgage rates can impact your monthly mortgage payment. That’s why it’s important to work with a trusted real estate professional who follows what the experts are projecting for mortgage rates for the days, months, and years ahead.
So, if you are looking to sell property in Metro Atlanta and on Lake Lanier, sign up for a FREE 45-minute marketing success consultation session.
Mortgage rates are likely to fluctuate depending on what happens with inflation moving forward, but they have dropped slightly in recent weeks. If a 7% rate was too high for you, it may be time to contact a lender to see if the current rate is more in line with your goal for a monthly housing expense. Contact our sponsoring lending partner, Parker Couch.