Why you should lock in a mortgage rate today

If inflation still continues Cooler than the recent high, and with interest rates rising significantly from 2020 lows, many potential home buyers decided to sit on the sidelines. With interest rates for a 30-year mortgage at 6.88% and a 15-year mortgage at 6.30% as of July 24, demand for a new home has declined.

But historically, Today’s mortgage and mortgage refinance interest rates Not exceptionally high. And if buyers are looking to buy a home now, they can be best served by acting fast and locking in today’s rate. Because the rate they can get next week or next month might be higher.

Not sure if you can qualify for a mortgage rate? Check the rates here and find out!

Why you should lock in a mortgage rate today

Mortgage rates in July 2023 are not what they were in July 2022, and they certainly are not what they were in July 2021. But that doesn’t mean it’s not worth securing a mortgage loan now. Many Americans need to expand or downsize and cut costs, which may require moving to a new home.

But the primary reason potential buyers want to act now is simple: The Federal Reserve is expected to raise interest rates again When they meet later this week. The current benchmark rate is between 5% and 5.25%. Most experts expect it to be slightly higher, with a range of 5.25% to 5.50% not unlikely.

If you’re a buyer who knows they need to move and will do so in the near future, applying for a mortgage today may make sense. This is not a rate you have to keep forever or even for the next few years, but an exception Adjustable rate mortgagesIt may be the lowest you can get for now.

Explore mortgage rates and options here now to learn more

Other considerations

The open Fed rate hike, however, is only one (albeit major) component to take into account. Mortgage interest rates can always be refinanced in the future. And that future isn’t too far off. If the Fed continues to see inflation decline, they may hold off on any additional rate hikes after July (A June break increase only pass). And rates may even begin to decline by the end of the year or by 2024. So higher-than-usual rates now may only be temporary, although no one knows for sure where rates will go in the next 12 to 18 months.

Housing inventory is also a factor. In major parts of the country, available inventory is low and there are many buyers waiting in the wings. If you live in one of these segments — and finally find your dream home — it may be worth buying, even with high interest rates, versus waiting for rates to drop only to have the home you love disappear from the market.

“Buyers should focus on their needs for housing and the availability of homes in their desired location. If they find a home that suits their needs, they should not hesitate because of high-interest rates,” David A. Krebs, a licensed mortgage broker at Duck Mortgage, said recently CBS News.

Learn more about your mortgage purchase options here now.

Bottom line

Working aggressively to secure an interest rate below 7% may not sound like one’s ideal scenario but unfortunately, it is a realistic one in today’s high rate environment. So if you absolutely need to buy a new home and want to do your best to get as low a rate as possible, it might be worth getting active now before the Fed sends rates up again. By locking in a mortgage rate today you can likely get a lower rate than if you wait until August — and you can always refinance when rates inevitably drop in the future.