- Mortgage interest rates are holding steady at just over 6%
- Rates are unlikely to fall again to 2-3%, say industry experts, and are not directly tied to action by the Federal Reserve.
- As rates decline, more buyers are likely to enter the market, boosting prices and competition for homes.
If you're looking to buy or refinance a home, you may get excited when you hear that the Federal Reserve has cut interest rates like it did this week.
"It's a common misconception that the Federal Reserve sets mortgage rates," says mortgage advisor Ben Barber.
Industry experts say don't hold your breath for mortgage rates to go down to those ultra low rates we saw about 5 years ago.
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"Unfortunately, when we had the 2% and 3% interest rates, people began to think that maybe that was the new norm," notes real estate agent Jenna Chmielewski.
Mortgage adviser Ben Barber of Texana Bank says those ultra low rates of 2% or 3% were the result of government intervention...and we're not likely to see a repeat anytime soon.
"Rates are likely to stay about where they are now if you don't see any big changes in the economy," says Barber.
So if you're thinking about a home mortgage or refinance, should you wait? "It depends on each individual case," says Barber.
"We're not waiting," says Brooklyn neighbor Taylor Aue. Current interest rates? "I think generally they're still pretty decent rates right now. That doesn't hold us back."
"As the interest rates do tick down, that's going to drive more demand, and what that's going to do is that's going to surge the price," says Chmielewski.
In other words, if you wait, you may get a lower interest rate, but you'll have more competition in the market and prices trending upward.
I remember when I was buying my first place, um, 6% was considered pretty good, I tell Barber. He says: "You know, my first place, it was 7.25%, and I handled that just fine....But that was many years ago. And what we've seen is home prices have gone up, which makes the loan amounts higher and the payment higher."
"Mortgage rates have been pretty stable for the last 8 to 12 weeks in the mid 6% range," he notes.
"You really have to look and see. Is the time better now to buy it at a lower price with a slightly higher interest rate, or do we want to hold off? And a lot of it still is driven by lifestyle factors," says Chmielewski.
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