If you’re considering buying or selling a home, mortgage rates are probably a key concern for you. It’s likely you know they affect your monthly mortgage payments, which is crucial for your planning. Here’s what you should keep in mind.

What’s Happening with Mortgage Rates?

Mortgage rates have been falling lately. This is certainly positive for those looking to buy a home, but it's essential to remember that rates can fluctuate since they're influenced by several factors.

Factors like the economy, the job market, inflation, and the Federal Reserve's decisions all influence things. So, even when interest rates drop, they might still fluctuate a little based on the latest economic information. As Odeta Kushi, Deputy Chief Economist at First American, points out:

“The ongoing deceleration in inflation, coupled with the Federal Reserve’s recent indication of potential rate cuts [in 2024], suggests an environment supportive of modest declines in mortgage rates. Barring any unforeseen circumstances and resurgence in inflation, lower mortgage rates could be on the horizon, but the journey towards them might be slow and bumpy.”
— Odeta Kushi, Deputy Chief Economist at First American

How Do These Changes Affect You?

When mortgage rates fluctuate, they impact your monthly home loan payment. Even a slight change in the rate can significantly affect how much you owe each month.

Check out the chart below to see how different mortgage rates affect your monthly house payment for various loan amounts. Let’s say you’re comfortable with a monthly payment of $2,600 for your home loan. The green section in the chart highlights payments that are within that range or lower based on different mortgage rates.

Knowing how mortgage rates affect your payment can help you make more informed choices.

How Can You Keep Track of the Latest on Rates?

Real estate agents have the knowledge to help you navigate the current market and understand its implications for you. They can offer tools and visuals—such as the chart above—to illustrate how changes in rates affect your buying power.

You don't have to be a mortgage expert. What you really need is a professional to help you navigate the market and guide you through the process of buying or selling your home.

Bottom Line

If you have any questions about the housing market, feel free to reach out. It'll help you get a clearer picture of what's happening and how to navigate it.