April 25, 2023
After months of increasing mortgage interest rates, we’ve recently seen rates begin to drop ahead of the spring homebuying season—and that’s great news for potential buyers.
This is how, when the Fed kept raising rates over the past year to battle inflation, it did have indirect effects on mortgage rates, and they rose above 7%.
As we inched closer to spring, mortgage rates began to lower and there were signs it could continue. When the events surrounding Silicon Valley Bank and Signature Bank unfolded, speculation rose that the Fed would slow their rate hike pace, which they did, although they still raised the rate slightly but not nearly as high as previously.
This is all great news for potential homebuyers, but there are some steps they should take to have the best experience and results possible.
More than three in 10 (34%) of potential first-time homebuyers planned to buy their first home or new home in 2023 if mortgage rates decreased, and with the decreases happening this spring, it shapes up to be competitive. And among current homeowners, 30% planned to buy a home if rates fell and 35% plan to use the equity they’ve built, furthering the level of competition.
• Find a local lender and realtor who know the area well and can guide you.
• Explore all financing options with your lender, including down payment and grant programs, and first-time homebuyer programs.
• Sit down with someone you trust, such as a family member, or a financial professional to review your finances—knowing how much home you can afford is key to making winning offers.
• Be steadfast—determine your top needs and wants, don’t let secondary “nice to haves” dictate your decision.
Keep in mind that the market may continue to be up and down over the next few months, but staying focused on your goal and working with a local team can help you achieve or continue the dream of homeownership.