Mortgage rates have recently fallen to their lowest level in more than a year and a half. This is significant news if you’ve been waiting on the sidelines for the perfect moment to jump into the housing market.

Even a modest dip in mortgage rates can translate into a lower monthly payment on your next home. But the drop we’re seeing isn’t small. As Sam Khater, Chief Economist at Freddie Mac, points out:

“Mortgage rates have fallen more than half a percent . . . and are at their lowest level since February 2023.”

To fully grasp how this benefits you, let’s look at the numbers. The recent reduction in rates has a meaningful impact on your monthly mortgage payment.

Here’s an example of what a monthly payment (principal and interest) would look like for a $400,000 loan if you bought a home during the peak mortgage rate period in April of this year versus what it could look like if you purchased a home today:

With rates dropping from 7.5% a few months ago to the low 6% range, you could see a significant reduction in your monthly payments. On a $400,000 loan, that decrease amounts to over $370 in monthly savings. That’s a substantial difference, leaving more room in your budget for other expenses or future investments.

Bottom Line

The recent drop in mortgage rates means your purchasing power is stronger than it has been in nearly two years. If you’ve been waiting for the right moment, now could be it. Let’s connect to discuss your options and how you can capitalize on these favorable conditions.