What Mortgage Rates Mean For Buying and Selling Your Home.
With historically low interest rates, what does this mean for buyers? Does it make a home more affordable? Hi, my name is Paula Quinn with RE/MAX Central local here to central Minnesota.
Over the past few weeks, Freddie Mac has reported the average 30 year fixed mortgage rate dropping to record lows, all the way down to 3.03% and lower in some cases. Last week’s reported rate reached the lowest point in the history of the survey, which dates back to 1971 as shown in this graph.
What does this mean for buyers? This is huge for home buyers. Those currently taking advantage of the increasing affordability that comes with historically low interest rates are winning big. According to Sam Khater, chief economist at Freddie Mac, “The summer’s heating up as record low mortgage rates continue to spur home buyer demand.” In addition, move.com notes, “Summer buying season is off to a roaring start.”
As buyers flooded into the market, realtor.com monthly traffic hit an all-time high of 86 million unique users in June 2020, breaking May’s record of 85 million unique users. Realtor.com daily traffic also hit its highest level ever of 7 million unique users on June 25th, signaling that despite the global pandemic, buyers are ready to make a purchase. Clearly buyers are capitalizing on today’s low rates.
As shown in this chart, the average monthly mortgage payment decreases significantly when rates are as low as they are today. That difference between now and the rates of 1970s and ’80s is a thousand dollars a month. Imagine! Mortgage rates have never been this low, lower monthly payments means savings that can add up significantly over the life of the home loan. It also means that qualified buyers may be able to purchase more home for their money. Maybe that’s a bigger home than they were able to afford at a higher rate. That’s an increasingly desirable option, considering the amount of time families are now spending at home given today’s health crisis.
Here’s the bottom line. If you’re in a position to buy a home this year, let’s connect and initiate the process while mortgage rates are historically low. And if you have any questions, please reach out to me. Remember, I want you to love where you live. Paula Quinn, your local realtor with RE/MAX Central. Talk to you soon.