Are Mortgage Rates Dropping?
Realtor.com reports that the week of January 18, 2024, was very good for mortgage loan interest rates. 30-year fixed-rate conventional mortgages saw rates dip to the 6.60% range, a low number we haven’t seen since last May.
New Home Sales
There are also reports of new home listings, which is encouraging because last year’s inventory wasn’t as plentiful as house hunters might have expected. More houses for sale means less competition for the inventory in a given housing market, which can translate into more affordable prices.
Realtor.com notes that more listings in 2024 could mean an earlier start to the house-hunting season than is typical. “Should the uptick in new listings persist, inventory levels could continue to improve as hesitant buyers and sellers move ahead of the flurry of activity in the spring,” according to the article.
Rates Still Drive the Market
Many, including those at Realtor.com, believe that the country is still in an environment where home loan interest rates continue to drive buyer decisions about FHA home loans, FHA refinance loan options, or even FHA reverse mortgages.
And rates haven’t fallen lower and stayed there for an extended period of time...yet. When that begins to happen, it may be the strongest indicator yet that the market is indeed beginning a recovery.
Is Now the Right Time to Buy?
Some borrowers and sellers are still on the fence, but if rates continue to fall lower, we may see a growing trend of house hunters taking cautious steps into the housing market. Some can’t afford to wait. They are already looking. But more may be waiting on the sidelines, hoping rates will fall even more.
One factor to remember when you’re trying to decide on the timing of your application? Many previously ready to pull the trigger on a new home decided not to during the pandemic and its aftermath. These future homeowners are part of that “on the sidelines” group we mentioned above.
Those buyers are likely ready to start looking once more and that could bring some tough competition from those who saved even more for a down payment or for closing costs in the meantime. It may be smart to save extra funds and make a more competitive offer with that in mind. You may not experience the seller’s market of seasons past, but there may still be a bit of competitiveness to deal with.
Being more competitive for a home loan isn’t just about what you can offer the seller in terms of the asking price or what you can offer the lender in terms of the down payment. It also means working harder on your FICO scores, debt ratio, and loan repayment history. Make yourself as attractive to the lender as possible for best results.
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