Despite the Federal Reserve's interest rate cut, mortgage rates may not see significant drops. Experts predict a potential rise before further decline.
It’s the first day of fall, but we’ll have to wait until the end of the week for cooler mornings in San Antonio
Rates have been mostly declining since July in anticipation of a Fed rate cut. The average rate on a 30-year mortgage isEven a modest drop in mortgage rates can translate into significant savings over the long run. For a home listed at last month's median U.S. sales price of $416,700, a buyer in Los Angeles who makes a 20% down payment at the current average mortgage rate would save about $312 a month compared to the cost of buying the same home in May.
“Ultimately, the pace of mortgage and Fed rate declines will be dictated by economic data,” said Rob Cook, vice president at Discover Home Loans. “If future data shows that the economy is slowing more than expected, it would increase pressure for the Fed to take more aggressive action with rate cuts which would likely translate into lower mortgage rates available to consumers.”. So far, the pullback in mortgage rates has yet to spur a meaningful rebound, although sales did rise slightly in July.
They're watching mortgage rates, but also other variables, including inflation, the health of the economy overall, and the presidential election. To Opyd's point, the pullback in mortgage rates and a pickup in the supply of homes on the market make for a favorable backdrop for home shoppers this fall, typically a slower time of the year for home sales.
“I would like to refinance at 5% or 5.25%, but I just don’t know if that’s realistic and if that’s going to take more than two years to get there," he said.
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