Good News. The average mortgage rate has been on the decline and during the week of August 5 reached its lowest level in approximately 15 months. Just 9 months ago the rate was its highest at 7.79%
The most recent decline is attributed to various factors, including the continued decline of inflation and the employment picture, among other things.
This is all good news for the residential real estate market as every decline makes the cost of homebuying less and less. And that’s good for sellers too. The greater the number of potential buyers in the market the better! Additionally, lower mortgage rates make it easier for those people who will be trading up or trading down.
By way of example, the mortgage today for a $300,000 home or condominium (at a 6.47% rate) would equate to a monthly mortgage of $1,890 (not including taxes, insurance or association fees, if appropriate. One year ago, when the rate was 7.79%, the monthly mortgage for the same unit would have been approximately $2,158, net of
other expenses.
According to Helen Bailey, Managing Broker, Pioneer Realty Group, the decrease from one year ago could mean different things to different people. “Depending on where they are in the process, this drop may be the impetus prospective homebuyers need to start home shopping in earnest,” Bailey said. “For others, this may mark the start of getting things like finances in order to begin the process in 60 days.”
Bailey suggests that first time buyers especially may want to take some time to better understand the home buying process and what is involved in shoring up credit and other financial matters.
“Buying a home is exciting and exhilarating,” she said. “And it helps to be organized and prepared to move through the process.