If you’re thinking about buying a home, chances are you’ve got mortgage rates on your mind. You’ve heard they impact how much you can afford in your monthly mortgage payment, and you want to make sure you’re factoring that in as you plan your move. But, it can feel a bit overwhelming to keep track of it all. Here’s what you need to know.
What ‘s Impacting Mortgage Rates?
Rates have been volatile – that means they’re bouncing around a bit. And, you may be wondering, why? The answer is complicated because rates are affected by so many factors.
Things like what’s happening in the broader economy and the job market, the current inflation rate, decisions made by the Federal Reserve, geopolitical uncertainty, and more have an impact.
Lately, all of those factors have come into play, and it’s caused the volatility we’ve seen.
As Odeta Kushi, Deputy Chief Economist at First American, explains:
“Ongoing inflation deceleration, a slowing economy and even geopolitical uncertainty can contribute to lower mortgage rates. On the other hand, data that signals upside risk to inflation may result in higher rates.”
Real Estate Professionals Can Help Make Sense of it All
While you could drill down into each of those things to really understand how they impact rates, that would be a lot of work. Instead of spending your time on that, lean on the pros.
They coach people through market conditions all the time. They’ll focus on giving you a quick summary of any broader trends up or down, what experts say lays ahead, and how all of that impacts you.
Take this chart as an example.
It gives you an idea of how mortgage rates impact your monthly payment when you buy a home. Imagine being able to make a payment between $2,500 and $2,600 work for your budget (principal and interest only). The green part in the chart shows payments in that range or lower based on varying mortgage rates (see chart below):
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