JACKSONVILLE, Fla. – Mortgage rates hit a 15-month low this week, according to Freddie Mac, with the average rate for a 30-year fixed-rate mortgage dropping to 6.47%.
The decline comes after weaker-than-expected employment data increased the possibility of the Federal Reserve cutting interest rates soon.
MORE: Fed Chair Powell says September interest rate cut could be ‘on the table’ as inflation cools
Rates dropped below 6.5% for the first time since May of 2023, falling more than a full percentage point since the October peak of 7.79%.
If you were recently priced out of a home, local realtor Andrew “Fletch” Fletcher says you might want to start your search again.
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“When’s the best time to plant a tree? Well, 20 years ago. When’s the best time to buy a house? It might have been three years ago when interest rates were 3.5%. But the second-best time is now, because housing continues to go up in value consistently, and as we get into this fall and winter season, houses are going to continue to sell,” Fletcher said. “So, if you’re like waiting on the fence, I would say, don’t wait any longer. This is a good time to buy.”
Fletcher said he sees a lot of homebuyers that are waiting to buy until interest rates come down further. He doesn’t expect that interest rates are going to make any major moves.
Luke Morris, a loan originator with First Integrity Mortgage Services, agrees that it’s unlikely to see another drop in interest rates.
“The Fed is projected to cut. Everyone thinks intuitively, that mortgage rates will go down with that. They do trade on the long end range of rates, though, so it’s not a given,” Morris said. “I would explore your options now, while they’re lower than they have been. If they improve, that’s great, you know where you stand.”
The advice for potential home buyers is to consider acting now, as future rate cuts may not necessarily lead to lower mortgage payments.
We asked Jason Kindler, President of First Coast Mortgage Funding to do a little math for us: How much will this decline in mortgage rates save homebuyers?
“On average, if we’re doing a $350,000 loan amount, the decrease in the rates over the last week would save a would save a borrower, $230 a month,” Kindler said.
That’s a difference of almost $3,000 annually. Kindler believes that if interest rates drop again, there will be a flood of buyers, leading to increased demand and home prices.
“We could be seeing a potential rate cut again in September, that demand is going to start growing. So, if you’re if you’re wanting to move, now is the time,” Kindler said.