This year, the 30-year fixed mortgage rate has been bouncing between 6% and 7%. If you’ve been on the fence about buying a home, it’s helpful to know exactly how a 1%, or even a 0.5%, mortgage rate changes can affect your purchasing power.
The chart below helps show the general relationship between mortgage rates and a typical monthly mortgage payment:
Even a 0.5% change can greatly impact your monthly payment. And since rates have been moving between 6% and 7% for a while now, you can see how it impacts your purchasing power as rates go down.
What This Means for You
You may be tempted to put your homebuying plans on hold, hoping that rates will fall. But that can be risky. No one knows where rates will go, and trying to time them for your benefit is tough. Lisa Sturtevant, Housing Economist at Bright MLS, explains:
“It is typically a fool’s errand for a homebuyer to try to time rates in this market . . . But volatility in mortgage rates right now can have a real impact on buyers’ monthly payments.”
That’s why it’s critical to lean on your expert real estate advisors to explore your mortgage options, understand what impacts mortgage rates, and plan your homebuying budget around today’s volatility. They’ll also be able to offer advice tailored to your specific situation and goals so you have what you need to make an informed decision.
Bottom Line
Changes in mortgage rates could impact your ability to buy a home. If you’re considering making a move, let’s connect with a professional real estate expert at KM Realty Group LLC, Chicago, so you have a strong plan.
