Likely due to market recession concerns, the average 30 Year Mortgage Rate dropped by half a percentage point from roughly 5.8% to 5.3% this past week which is very good news for 1st time buyers and for all those seeking new 30yr terms.  This adjustment will save new buyers new 30yr term clients on average about $100 a month, and roughly $1200 in annual savings is always a good thing.  But.. stay tuned.

     It is a good idea when you are actively looking to purchase, that you keep a close eye on your debt to income ratios, and that you keep a very open mind as the real costs of what will be a likely different interest rate on an offer accepted this week versus one that is worked out in possibly the very near future.  It is prudent to consider that a very few thousand dollars in “Negotiated Price Point” may not be with the time needed to negotiate, should you be jeopardize losing a favorable rate-lock.  It is possible the higher purchase price may be a better deal with today’s Interest Rate locked-in, vs the negotiated lower price point with a potentially higher rate, which could cost tens of thousands of dollars more over time.  It is very prudent to pay attention to what current trends are indicating.

  Right now, today in mid-July, despite the recent fact of the drop in rates which started this post, we are hearing the following: The Fed is likely to hike rates three-quarters of a point or even more, in response to new economic signals” and “Word on the street is that the Federal Reserve may raise rates by as much as 1% at their July 26 meeting to try and to quell unprecedented Inflation” which is currently running at a 40-year high.

Also understand that The Federal Reserve does not set mortgage rates, and there is no direct relationship between what the Fed does, and what happens with mortgage rates.  With that said, often Mortgage  Lenders set their rates in anticipation of what the Fed is likely to do.  So, did rates just “ease” in anticipation of them feeling the need very soon to have to “go back up to where they just were?  These thoughts.. well they are, the definition of speculation. 

Taking current trends into account however, for the foreseeable future, all signs are trending towards Locking-in to an agreement sooner vs. later, for best rates.
Whether buying or selling,  consult with your trusted Real Estate Agent here at Maine Real Estate Choice, today!