As we move into the early Spring housing market, home buyers are keeping a close eye on mortgage rates. The latest update from Freddie Mac shows a slight decline in the average 30-year fixed mortgage rate, now at 6.87%, down from 6.89% last week.
What This Means for Home Buyers
For those considering a home purchase, this shift in mortgage rates can have a real impact on affordability. Here’s a breakdown of what buyers can expect in terms of monthly payments:
- A $400,000 home with a 20% down payment now comes with a monthly mortgage payment of $2,101.
- With a 10% down payment, that monthly cost rises to $2,364.
The Positive Side: A Buyer-Friendly Market?
One of the most encouraging signs is that mortgage rates have now fallen for four consecutive weeks. This trend is great news for buyers, as it aligns with the start of the Spring market—typically a time when more homes become available.
Additionally, mortgage applications are on the rise, signaling that buyers are gaining confidence. If housing inventory continues to improve, buyers could find themselves in a stronger position compared to recent years, when limited supply and high rates made purchasing more challenging.
The Challenge: Affordability Beyond Interest Rates
While slightly lower mortgage rates are welcome news, affordability remains a concern. The total cost of homeownership includes more than just the mortgage payment—it also factors in:
✅ Home Prices – Have prices adjusted in response to interest rate shifts?
✅ Property Taxes – Vary by location and can significantly impact costs.
✅ Home Insurance – Premiums have risen in many areas.
✅ Utilities & Maintenance – Long-term costs that buyers need to budget for.
Bottom Line
The recent dip in mortgage rates is a step in the right direction, but buyers should still approach the market with a holistic view of affordability. If you’re considering a move this Spring, now is the time to start preparing—getting pre-approved, understanding total costs, and keeping an eye on local inventory trends.
Thinking about buying a home? Let’s talk about your options!
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