Mortgage rates drop to lowest rate in more than a year
Mortgage rates dipped significantly this week, dropping to the lowest level in more than a year, according to Freddie Mac. Rates for 30-year, fixed-rate mortgages averaged 6.47%, down from 6.73% last week.
"Mortgage rates plunged this week to their lowest level in over a year following the likely overreaction to a less than favorable employment report and financial market turbulence for an economy that remains on solid footing," Freddie Mac Chief Economist Sam Khater said.
Last year at this time, the average interest rate for 30-year mortgages was 6.96%, signaling that rates are finally starting to come down closer to the 6% mark.
Rates for 15-year mortgages also took a large dive, dropping to 5.63% from 5.99%. Last year, rates were much higher, at 6.43%.
"The decline in mortgage rates does increase prospective homebuyers’ purchasing power and should begin to pique their interest in making a move," Khater said. "Additionally, this drop in rates is already providing some existing homeowners the opportunity to refinance, with the refinance share of market mortgage applications reaching nearly 42%, the highest since March 2022."
If you are ready to shop around for a home loan, consider using Credible to help you easily compare interest rates from multiple lenders in minutes.
THE AVERAGE DOWN PAYMENT FOR THE TYPICAL US HOME REACHES $127,750: ZILLOW
The upcoming presidential election is having an effect on the homebuying market, a Veteran Homebuying Report, conducted by Veteran United Home Loans, found. The report asked veterans, active-duty military members and civilians how the election informed their decision to buy or not buy homes.
About 60% of people who plan to buy a home in the next few years said the current election is a factor in their purchasing timeline. Nearly 38% plan to wait to buy until after the election
"The upcoming election is clearly weighing on the minds of prospective homebuyers," said Chris Birk, Veterans United Home Loans vice president of mortgage insight. "Americans are considering the potential impacts of political changes on the economy and housing market, leading many to adjust their buying timelines accordingly."
Many buyers are waiting to see what happens to the market after the outcome of the election has been determined. All survey respondents ranked inflation and housing affordability as their top two election issues, which are both issues that seriously affect the housing market.
A site like Credible can let you view multiple mortgage lenders and provide you with personalized rates within just minutes, all without impacting your credit.
MORTGAGE PAYMENTS SOAR FOR PROSPECTIVE HOMEOWNERS IN SWING STATES: REALTOR.COM
A few years ago, Americans were leaving disaster-prone states in the thousands. That trend has turned around, particularly in states like Texas and Florida. High-fire-risk counties, many of which are in Texas, saw over 63,000 people moving in rather than out in 2023, a Redfin study found.
High-flood counties also saw a large influx of over 16,000 people, with many of those people moving to Florida. Despite high insurance costs in states like Florida, there are other factors driving these moves.
"Ballooning insurance costs and intensifying natural disasters are driving thousands of Americans out of risky areas, but those people are quickly being replaced by other people for whom climate change isn’t the top concern," Redfin Senior Economist Elijah de la Campa said.
"For a lot of Americans, things like cost of living and proximity to family take precedence over catastrophe risk, which can feel less immediate and more abstract," de la Campa said. "But the cost-benefit calculus seems to be shifting in places like California and Florida, where skyrocketing home insurance costs and an uptick in high-profile disasters have had a tangible impact on residents and made national news."
Florida accounted for over 50% of the migration to high-flood-risk areas in 2023. Although that’s high for Florida, it’s down slightly from 57.3% in 2022. Meanwhile, Texas had five out of the 10 high-fire-risk counties Americans moved to.
"The main climate issue in Houston is flooding, but the major factor driving me away is the heat," Redfin Premier real estate agent Nicole Nodarse explained. "But a lot of people are still moving here because they like the low prices and the politics. Homeowners insurance is becoming a big deal, though; it’s much more expensive than it used to be, and a lot of people who installed 30-year roofs are now having to replace them after 15 years because some insurers won’t cover the home if the roof is older than that."
You can explore your mortgage options in minutes by visiting Credible to compare rates and lenders.
MANY HOMES ARE SITTING STAGNANT ON THE MARKET, CAUSING MORE FREQUENT PRICE DROPS
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.