The average interest rate on a 30-year mortgage is now 6.09%. This marks the first annual decline year over year since June 2020. As a direct result of lower interest rates, housing affordability has improved. If you’ve been sitting on the sidelines waiting to buy (and can afford to do so), it’s time to play ball!
While interest rates are down, home prices are not. According to the Federal Housing Agency, home prices increased 4.5% from July 2023 to July 2024. This month, however, marks the third consecutive month where home prices have remained relatively flat. Stable prices, coupled with lower mortgage rates, equate to improved affordability.
Don’t wait until other potential buyers realize that prices are not going to decrease to make your move. Increased competition means it will be harder to get what you want.
My Advice
The Fed’s rate cut (by a half percentage point on September 18th) is unlikely to significantly impact current mortgage rates. This is due to the fact that lenders already adjusted interest rates in anticipation of the rate cut. While a gradual decline in mortgage rates is possible, it is not expected in the short-term. It’s also important to remember that “the Fed’s benchmark rate doesn’t directly set or correspond to mortgage rates.”
Bonus: The Best Week to Buy a Home
Fun Fact: September 29th – October 5th is the best week to buy a home and the two weeks that follow are just about as favorable. We’ll go into detail about the benefits of buying a home in the fall in a subsequent article. For now, Hannah Jones and Danielle Hale of Realtor.com sum it up best:
“This week historically has shown the best balance of market conditions that favor buyers. Inventory tends to be high, prices are below peak levels, demand is waning, and the pace of the market slows to a more manageable speed.”
How are you feeling about the state of the housing market? Let me know in the comments!
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