09/03/2024
You might see headlines or social media posts this week talking about rate cuts. Just because the Fed cuts rates doesn’t mean mortgage rates drop right away.
This move will impact things like car loans and HELOCs almost immediately, but mortgage rates usually take a bit longer—sometimes a few weeks—to catch up.
I want to help you understand what all this means for you. Don’t get caught up in the clickbait!
Rates started 2024 just over 7%, but by the end of Q1/beginning of Q2 jumped up to nearly 7.5%. Thankfully, they completely reversed course at the start of Q3, as positive inflation/jobs data sent rates well below the 7% threshold.
Below is an example of the roller coaster we have seen over the last 12 months:
October 2023 - $500,000 loan
Rate = 7.750%
Payment = $3,580.00
January 2024- $500,000 loan
Rate = 7.125%
Payment = $3,370.00
August 2024 - $500,000 loan
Rate = 6.500%
Payment = $3,160.00
December 2024 - $500,000 loan
Rate = 6.000% (hopefully*)
Payment = $2,995.00
As you can see, the trend has been extremely positive for homebuyers and has resulted in monthly savings of over $400 since they peaked in 2023.
I've had some clients ask me if they should refinance yet---get in touch with your preferred mortgage lender, or respond to this post and I'll suggest a few folks to reach out to. Most will likely encourage you to wait a bit longer & I think they're right but it would be smart for you to get the ball rolling so that when rates hit your goal you can just give the green light.
Helpful info? Questions? Reach out!