Good News For Buyers – Mortgage Rates Are Dropping

Yes, you read that correctly. Mortgage rates just reached a new 4-month low in recent readings following an encouraging inflation report. Down from its peak at around 7.5%, the most recent rates clocked in at 6.04% which should be encouraging news for buyers. As inflation begins to cool following a tumultuous 2022, so will mortgage rates. Some experts like Barry Habib, have projected that rates could touch down to 5% by early Q2 of 2023. So what does this mean for buyers and sellers? I personally think the 5% rate in 2023 will look a lot more appealing than the 5% rate in 2022. You have to remember, in 2022, rates started the year off in the 3% range. When the Fed began raising rates and as inflation rose to historic levels, it caused mortgage rates to skyrocket at a pace we have never seen. As rates begin to dip and level out, I believe the buyers that were pushed to the sidelines due to affordability concerns will re-enter the market with some experience under their belt and a lot more market knowledge than they started out with.

I get a sense that we’ll have a strong spring and summer market here in Northwest Vermont because the inventory of homes is still historically low. If you were thinking about purchasing a home last year but couldn’t get to the finish line, re-entering right now could provide you with some opportunity with rates lowering. In addition, the national and statewide buzz has yet to take-off on the mortgage rate front. You can be sure when that does happen, a frenzy of buyers will be chomping at the bit to finally secure a home.

Now, I understand the housing market doesn’t begin and end with mortgage rates. Fears over a recession have caused many buyers to hold off, stating that having liquid funds in times of uncertainty is important to them. Everyone’s situation is different and two separate buyers could both be correct in wanting to buy or wanting to wait. What’s best for your current situation? Shoot me a message or reach out to me for a few recommendations on local lenders. I would be happy to help.