Many buyers are holding off, hoping mortgage rates will drop significantly. However, according to experts, while rates are expected to decline, they likely won’t fall as much as people are anticipating.
How Much Will Rates Drop?
Earlier this year, projections suggested mortgage rates could dip below 6% by the end of the year. However, recent forecasts from Fannie Mae, the Mortgage Bankers Association (MBA), and Wells Fargo now indicate they are more likely to stabilize around 6.5% instead.
If you have been waiting for a significant drop, you may be waiting longer than expected. And if you need to move due to a job change, a growing family, or another life event, postponing your home search may not be the best choice.
Don't Wait for Lower Rates—Here’s How You Can Buy a Home Now
Since rates are not expected to drop significantly, consider these options to help make homeownership more affordable:
Mortgage Buydowns – This allows you to pay an upfront fee to lower your mortgage rate for a set period, reducing your monthly payments in the early years of your loan. Many buyers are negotiating buydowns with sellers.
Adjustable-Rate Mortgages (ARMs) – ARMs typically start with a lower rate than a traditional 30-year fixed mortgage, making them a good option if you plan to refinance later. Unlike the riskier ARMs from the mid-2000s, today’s versions require lenders to verify that buyers can afford future payments.
Assumable Mortgages – Some sellers have low-rate mortgages that buyers can take over, keeping their existing lower interest rate. More than 11 million homes qualify for this option, making it an opportunity worth exploring.
The Bottom Line
If you have been waiting for a major drop in rates, it may not be the best strategy. Don't wait for lower rates—here’s how you can buy a home now by exploring options like buydowns, ARMs, and assumable mortgages to help secure a lower payment today.
If you are thinking about buying, I am happy to walk you through your options and help you find the right home in this market. Call me, Teresa Hill, to start the conversation.
Information sourced from Fannie Mae, the Mortgage Bankers Association (MBA), and Wells Fargo, ResiClub, NAR, Realtor.com, & Keeping Current Matters.
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