Now is the perfect time to buy a home. Current mortgage interest rates are hovering around 3.8% for a 30-year fixed loan. Historically speaking mortgage rates are almost matching the all time low. Getting a home loan at a lower rate results in a lower monthly payment, and as a result a lower total home cost. You can save a considerable amount now and make a great investment toward your financial future.
Another good way to take advantage of the low interest rate is to refinance your current home. Mortgage refinancing is when you replace your existing home loan with a new one. The new loan pays off the old and you have a new interest rate, and a new set of terms. Certain fees are required to make the change.
Talk with your Realtor® and loan officer to work through
your finances to consider your best options.
WHAT DRIVES THE RATES?
One key factor driving the interest rates is the Federal Reserve, the central banking system of the United States. Any motion from the Federal Reserve influences interest rates and stocks. Recent testimony on July 11th before the Senate, Jerome Powell, the Federal Chairman, communicated that the central bank will cut interest rates in July, and continue to ease policy further in the second half of the year. The cut in interest rates has created a dramatic shift in the market. In fact, stocks reached new highs in response to this, the S&P 500 hit 3,000 for the first time. On July 31st the Federal Reserve followed through and cut interest rates by .25%, the first reduction in rates since 2008. This rate cut directly lowers credit costs.
Another trend affecting the housing market right now is that the inventory of available homes for sale is low. This means that there are fewer houses on the market than there are buyers. This is excellent for sellers because many times multiple offers can be proposed, thus driving the price of a sale. Because there are more buyers than sellers, having the right Realtor® for your home search is crucial as they have first-hand knowledge of when a house is listed.
With low inventory and low interest rate, it is both a seller's market, and a buyer's market! Whether you want to buy or sell a home contact your Mike Thomas Associates Realtors® to guide you through the process quickly and smoothly.