Lower Interest rates = More Purchasing Power!

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Real Estate

If you want to buy a home, it's important to know how mortgage rates impact what you can afford and how much you’ll pay each month.   No one wants to be at the mercy of their new home either so  even if you are pre approved for a certain number you may not want to use the entire budget.  That's another story for another day though. 

Back to interest rates... 

Fortunately, 30-year fixed mortgage rates have come down significantly since the end of October and are currently under 7%, according to Freddie Mac (see graph below):


 This is the best news we've had in a long time and a very exciting start to 2024. 

As a recent article from Bankrate says:

“The rate cool-off somewhat eases the housing affordability squeeze.”

And according to Edward Seiler, AVP of Housing Economics and Executive Director of the Research Institute for Housing America at the Mortgage Bankers Association (MBA):


“MBA expects that affordability conditions will continue to improve as mortgage rates decline . . .”

Here’s a bit more context...

How Mortgage Rates Affect Your Search for a Home

On the path to homeownership, its pivotal that you grasp the connection between mortgage rates and your monthly home payment.


Please examine the chart below! It illustrates how your ability to afford a home changes when mortgage rates shift. 
You will see even small changes in rates can affect your budget and the loan amount you can afford.


Imagine your budget allows for a monthly payment between $2,400 and $2,500. The green part in the chart shows payments in that range or lower (see chart below):



Get Help from Reliable Experts To Understand Your Budget and Plan Ahead

When you're looking to buy a home, it's important to get guidance from a local Realtor (ahem cue the spotlight)  and a trusted lender.  I have several lenders that I work with.  You can choose the one that works the best for your communication style.  Their entire reason for existing is to help you explore different mortgage options, understand what makes mortgage rates go up or down, and how those changes impact you. Don't be afraid to bring all your burning questions!

When you  look at the numbers and the latest data together, they can adjusting your strategy based on today's rates, making you better prepared and ready confident about your home purchase.

Bottom Line

If you’re looking to buy a home, you should know the recent downward trend in mortgage rates is good news for your move. Let’s connect and plan your next steps.  Or register for my next FREE homebuyer workshop on February 21st.  It's virtual and I'll have one of my preferred lenders Jamal Harris on deck to answer all of your questions.