On Wednesday, the Federal Reserve announced they were dropping the federal funds rate by 50 basis points, or 0.5%. This marks the first time the Fed has decided to lower interest rates since March of 2022. Although the fed funds rate doesn’t directly influence mortgage rates, this is still big news for homebuyers and existing homeowners. The last couple of months have seen mortgage rates slowly declining in anticipation of the Fed’s decision on Wednesday with the biggest question being whether we would get a rate cut of 25 or 50 basis points.
So, what does this all mean? If you bought a home and got a rate in the 7% range you should consult us about a refinance immediately. We now have two Keller Home Loans loan officers on our team to assist our clients and friends. A refinance could potentially save you hundreds of dollars every month. If you currently have a rate between 6-7% getting a consultation would still be wise since, at the time of this writing, it is possible to get a 30 year fixed rate mortgage BELOW 6%. And if it does not make sense financially to refinance now, it may make sense in a couple months from now. If you want to buy a home but have been waiting to see how far mortgage rates would drop, you should contact a real estate agent now. First, the number of buyers, who have been waiting for mortgage rates to drop, is going to dramatically increase in the coming months. This is going to cause Charlotte home prices to rise even faster than the 6.5% that they rose in the previous 12 months. Secondly, with home prices rising, you will be borrowing a larger amount. Even with a lower interest rate, you could find that your mortgage payment is actually higher than purchasing the same home today at current interest rates. For more detail on comparing the cost of waiting, see our blog “Should I Wait For Mortgage Rates To Drop?”
Bottom line, if you have been waiting to buy, sell, or refinance your home, now is the time to get in touch with an expert in your market. The coming year will be hectic in real estate so having a solid plan will be beneficial for you and your family.
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