What Lower Mortgage Rates Mean for Your Purchasing Power

Home>>Mortgage News>> What Lower Mortgage Rates Mean for Your Purchasing Power

What Lower Mortgage Rates Mean for Your Purchasing Power

If you want to buy a home, it’s important to know how mortgage rates impact what you can afford and how much you’ll pay each month. Fortunately, rates for 30-year fixed mortgages have come down significantly since the end of October and are currently under 7%, according to Freddie Mac (see graph below):

This recent trend is great news for buyers. As a recent article from Bankrate says:

“The rate cool-off somewhat eases the housing affordability squeeze.”

According to Edward Seiler, AVP of Housing Economics and Executive Director of the Research Institute for Housing America at the Mortgage Bankers Association (MBA):

“MBA expects that affordability conditions will continue to improve as mortgage rates decline…”

Here’s a bit more context on how this could help with your plans to buy a home.

How Mortgage Rates Affect Your Search for a Home

Understanding the connection between mortgage rates and your monthly home payment is crucial for your plans to become a homeowner. The chart below illustrates how your ability to afford a home changes when mortgage rates shift. Imagine your budget allows for a monthly payment between $2,400 and $2,500. The green part in the chart shows payments in that range or lower (see chart below):

As you can see, even small rate changes can affect your budget and the loan amount you can afford.

Get Help from Reliable Experts To Understand Your Budget and Plan Ahead

When you’re looking to buy a home, it’s important to get guidance from a licensed mortgage professional. They can help you explore different mortgage options, understand what makes mortgage rates go up or down, and how those changes impact you.

By looking at the numbers and the latest data together, and then adjusting your strategy based on today’s rates, you’ll be better prepared and ready to buy a home.

Bottom Line

If you’re looking to buy a home, you should know the recent downward trend in mortgage rates is good news for your move. Connect with a licensed mortgage professional today to plan your next steps.

Curious to see what your loan payment could look like? Try our interactive mortgage calculator below:

House Payment Calculator:

GET A RATE QUOTE

FIND A LICENSED MORTGAGE LOAN OFFICER

Conventional Loans

Refinance

FHA Loans

USDA Loans

VA Loans

Jumbo Loans

Reverse Mortgage

Homes for Heroes & First Responder Mortgages

Doctor Loans

First-Time Homebuyers

Down Payment Assistance

FHA Condo

Renovation Loans

Arizona Programs

Rachel Caple

Rachel Caple has more than 18 years of experience in mortgage banking industry. Residing in Castle Rock, CO. Rachel spends her spare time with her husband, Sean and 4 boys. She also enjoys traveling, attending hockey games, and playing golf (or attempting to).

Quick Rate Quote

Feel free to contact us if you have any questions or would like a second option on your existing mortgage.