March 21, 2019.
Where are mortgage rates going in 2019? Down, according to the latest Federal Reserve decision. When the Fed met March 20, 2019, it opted not to raise the federal funds rate. The Federal Reserve also indicated there wouldn’t be any more rate hikes for the upcoming year, causing mortgage rates to fall.
How to take advantage of the Fed’s decision
Increases in the Fed’s target interest rate create short-term bumps in rates for car loan and credit card interest. Mortgage rates, on the other hand, usually see the impact indirectly. But the Federal Reserve’s decision not to move its rate — and probably eliminate two more rate hikes that were expected in 2019 — has triggered mortgage rates to drop to a one-year low.
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As a homebuyer, your mortgage interest rate directly affects your monthly payment. When rates are high, so is your monthly mortgage. Rate drops caused by the Fed’s indecision mean you could buy a home in your price range with a lower monthly payment.
Based on today’s rates, mortgage payments are over $1,000 cheaper. Homebuyers pay significantly less than their parents and grandparents did just decades ago, and fewer rate hikes help.
It may be time to take advantage while homebuying is considerably cheaper. To give an example, buying a $200,000 house at today’s 30-year fixed mortgage rate of 4.28 percent could cost you only $987 a month in mortgage.* Compared to a monthly payment of $1,148 at the formerly projected 5.6 percent interest, you could save $161 a month or $1,932 a year.
Freddie Mac pointed out after the Federal Reserve decision that mortgage rates have dropped “quite dramatically” in early 2019, while home prices remain moderate. Both factors support affordability so homebuyers come out ahead.
You had me at a better rate
There’s a reason most renters plan to buy a house within the next five years.** There’s also a reason many homeowners want to sell and trade up. Buying a house is a good investment and can be a great move when rates are free-falling. Buying at a lower rate gives you the chance to start building your equity and your net worth while keeping monthly payments manageable. Make it easy and Prequalify Now.
*MBS Highway payment estimate, 2019. Rates listed are for illustrative purposes only.
**2018 Fall Homebuyer Insights Report, Bank of America.
For educational purposes only. Please contact your qualified professional for specific guidance.
Sources are deemed reliable but not guaranteed.