Mortgage Rates Dropped! Here's What You Need To Know As a Home Buyer

 

 

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It’s been a busy week in real estate, and if you’ve been following the headlines, you probably noticed that interest rates have improved significantly. We just hit the lowest mortgage rates we've seen all year! While rates have ticked up a bit since then, they're still much better than at any other point in 2024.

 

We even had a client lock in a rate close to 6% with no discount points or origination fees—definitely a good opportunity for those who were waiting. But with better rates, the market has gotten more competitive. Just as I mentioned would happen, we’re seeing more showings on our listings, and the inquiries are pouring in.

 

Here's something to keep in mind: when mortgage rates improve by just half a percent, it can increase a buyer’s purchasing power by about 5%. For example, if someone was approved for $500K at a 7% rate, and the rate drops to 6.5%, that same buyer could now be approved for $525K. So, even small changes in rates make a big difference!

 

But, with the good comes the challenge—more competition means it’s harder to get concessions. It's all relative. If you’re wondering whether rates will get even better, we had a session with our lender partner, who’s optimistic about future rate reductions. But don’t wait too long! More sellers will list their homes, but they’ll also be buying, so inventory will remain tight and get absorbed quickly

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For those holding out for rates to drop to 5%, remember this: waiting could cost you more in the long run. Las Vegas is on fire, and everyone is bullish about the market here. By the time rates hit your target, home prices will likely have risen. So, do the math, and you’ll see that it makes zero financial sense to wait.