“The sharp drop in mortgage rates this week opened a window of opportunity for buyers who are looking to lock in their rate. At the lower rate, they not only save money on their monthly payment but a significant amount in interest over the life of the loan,” says Realtor®.com Manager of Economic Research George Ratiu.But the good times aren’t likely to last for long, he says. “I still expect rates to potentially move back toward 7% in the next few weeks.”
This “suggests that mortgage rates may have peaked,” Bright MLS Chief Economist Lisa Sturtevant says in a statement. The multiple listing service covers the mid-Atlantic region. But she cautions, “there will likely be ongoing volatility in rates amidst economic uncertainty.”
“Inflation tends to really drive mortgage rates,” says Ratiu.
“When there’s higher inflation, investors ask for higher returns. But now we see that inflation is cooling, the rates are cooling off as well,” says Nadia Evangelou, director of real estate research at the National Association of Realtors®. That doesn’t mean rates will stay a little lower.“We expect [rates] to be volatile until we see even further deceleration of inflation,” adds Evangelou.
“If rates were cut right now, we would have another housing boom,” says Miller. “The demand is still there.”
“People are wedded to their mortgage rates, and they’re unwilling to become buyers with all the uncertainty,” says Miller.
“Hopefully, it means rates are topping out so people can begin planning their purchases,” he says. “Buyers may become a bit more interested in going out to look at homes.”
“What we have to have in mind, [is] it’s better than an 8% rate, which is the historic average,” says Evangelou.
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