Mortgage rates fell over the weekend and appear to have stabilized in recent days. Rates have been volatile recently due to inflation and fears of a recession.
The Federal Reserve has been raising the fed funds rate in an effort to cool price growth, but now many fear it won’t be able to do so without slowing the economy so much that it slips into a mild recession.
Homebuyers have had a rough couple of years navigating a tough real estate market, first due to rapidly rising home prices during the pandemic and then, in 2022, rapidly rising mortgage rates. But as demand cools, those who can still afford to buy could have a bit more wiggle room with slightly lower rates and less competition.
“Buyers who have been waiting on the sidelines may see an opportunity to return to the market as things normalize a bit and volatility subsides,” says Robert Heck, vice president of mortgages at Morty. “While it may take years to develop, the Fed has made it clear that it will continue to take the necessary steps to reduce inflation.”
Mortgage rates today
Today’s Refinance Rates
use our free mortgage calculator to see how today’s interest rates will affect your monthly payments:
Your estimated monthly payment
- paying a 25% a higher down payment would save you $8,916.08 on interest charges
- Lower the interest rate in 1% I would save you $51,562.03
- Paying an additional $500 each month would reduce the length of the loan by 146 months
By clicking “More Details,” you’ll also see how much you’ll pay over the life of your mortgage, including how much goes toward principal versus interest.
Are mortgage rates going up?
Mortgage rates began rising from record lows in the second half of 2021 and have risen significantly so far in 2022. More recently, rates have been relatively volatile.
In June, the Consumer Price Index increased 9.1% year over year. The Federal Reserve has been working to control inflation and plans to raise the target federal funds rate three more times this year, following hikes in March, May, June and July.
Although not directly tied to the fed funds rate, mortgage rates sometimes rise as a result of Federal Reserve rate increases and investor expectations about how those increases will affect the economy. If inflation remains high, mortgage rates may remain at their current levels or even increase. But as the probability of a recession increases, mortgage rates could fall.
What do high rates mean for the real estate market?
When mortgage rates rise, homebuyers’ purchasing power declines, as more of their anticipated housing budget has to go toward interest payments. If rates go high enough, buyers can be pushed out of the market altogether, cooling demand and putting downward pressure on home price growth.
However, that doesn’t mean home prices will go down; in fact, they are is expected to increase even more so this year, just at a slower pace than we’ve seen in the last two years.
What is a good mortgage rate?
It can be difficult to know if a lender is offering you a good rate, which is why it’s so important to get pre-approved with multiple mortgage lenders and compare each offer. Get pre-approved with at least two or three lenders.
Your rate is not the only thing that matters. Be sure to compare both what your monthly costs would be and your initial costs, including lender fees.
Although mortgage rates are heavily influenced by economic factors beyond your control, there are a few things you can do to ensure you get a good rate:
- Consider fixed rates versus adjustable rates. You may be able to get a lower introductory rate with an adjustable-rate mortgage, which can be a good thing if you plan to move before the introductory period ends. But a fixed rate might be better if you’re buy a house forever because you won’t risk your rate going up later. Look at the rates your lender offers and weigh your options.
- Look at your finances. The stronger your financial situation, the lower your mortgage rate should be. Look for ways to increase your credit score or lower your debt to income ratio, if necessary. save for a senior Deposit Also helps
- Choose the right lender. Each lender charges different mortgage rates. choose the right one for your financial situation will help you get a good rate.