In a move that came longer than expected, the Feds decided on September 18, 2024 to lower interest rates. This move marks the first time the Feds lowered interest rates in 4 years (Forbes).
Federal Reserve Chairman, Jerome Powell, cited his reasons for lowering interest rates: “The U.S. economy is in good shape. It’s growing at a solid pace. Inflation is coming down. The labor market is in a strong pace. We want to keep it there. That’s what we’re doing.”
How Lower Interest Rates Affect Mortgage Rates
A decrease in interest rates is good news for homeowners and those looking to buy a home. Mortgage rates are at their lowest level in 19 months, with a 30-year mortgage loan dropping from 7.2% to 6.2% (source). Lowered rates mean more buying power and more buyers able to afford homes they were once priced out of. A decrease of even one basis point could mean the difference between affording a mortgage and not affording a mortgage.
With talk of the Feds lowering rates even more in November and further in 2025, the question remains: “When is the best time to buy a home?”
Is Now a Good Time to Buy a Home?
With the decrease in interest rates and mortgage rates, now is a good time to buy a home. Whether prospective homebuyers want to wait for lower mortgage rates in the coming months is a personal decision, but when it comes to making a smart decision, The Gamache Team is confident in its claim that now is a great time to buy a home.
Most people are likely to wait out lower interest rates so competition will be less to compete for the homes on the market. If a prospective homebuyer waits until the spring market, there will be more buyers competing for the same homes which increases prices and leads to bidding wars.
The current rates bring more buyers into the market, increasing the competition.
Consider Refinancing in the Future
Buyers who purchase now may be able to refinance their mortgage when rates get to a point that they feel comfortable with. Unlike others who wait for rates to drop before buying a home, current homeowners are already in a home, reducing the stress and hassle that comes with a frenzied market full of buyers ready to outbid, outlast, and outbuy.
If you can stretch yourself to purchase a home, anticipating lowered rates, you may be in a stronger position to “get the home of your dreams” before someone else does.
Connect with The Gamache Team to Discuss Your Homebuying Needs
If you are considering purchasing a home, contact The Gamache Team to discuss your home buying needs. We have over 50 years of real estate experience and buy and sell property ourselves in the Tri-Valley area. It would be our pleasure to help you become a homeowner.
