I’m sure many of you remember this time last year. We heard about COVID-19, but it wasn’t effecting our daily lives yet. A few weeks later, it’s terrifying trying to navigate the grocery store, let alone putting together a decent meal with what was left. Then, there was all this discussion about the economy, and we’re trapped inside, not able to do anything about it… It felt like we were getting more and more bad news every day.
Then mortgage rates dropped! It was amazing news for people looking to buy a home or refinance. In 2019, the average rate was 3.5-4%, now it’s averaging 2.5-3%. On a $400,000 30 year mortgage, it’s a difference of a couple hundred dollars a month. Enough of a difference that a ton of people took action.
Interest rates are projected to remain sub 3%, but increase slightly over the next year. This is mainly attributed to the recent election, as higher government spending increases interest rates.
Still good news for homebuyers, especially as inventory dwindles. These reduced monthly payments allow buyers some wiggle room as they put in offers on their dream homes, which often need to be above asking to get the contract.
For those who are interested in refinancing their current mortgage loan, you’ll have to do the math to see if it’s worth it. While it’s often said refinancing at a 2% reduction in your rate is a good idea, 1% may be enough incentive as well.
Check out this mortgage calculator from Nerd Wallet.
If you’re thinking about buying a home, I can introduce you to lenders in the area. They’ll get the conversation started and see what you can afford before we start looking at homes.
Feel free to contact me by clicking here!