Will Mortgage Rates be Lower Soon

Are you asking, “When will mortgage rates come down?” Well, the short answer is, likely not any time soon. Jobs data came out recently, and the economy added 172,000 jobs. That is more than double what the experts were anticipating. The job market is running pretty hot. That is a good sign for the economy. 

But it is not a good sign if you want mortgage rates to go lower. Often (but not always), the mortgage interest rates follow the Federal Reserve. Also known as the “Fed.” The Fed usually lowers rates as one of its tools to help stimulate the economy. Since the economy shows positive signs, there is a lower chance they will cut interest rates. Therefore, more than likely, mortgage rates won't be coming down any time soon. 

No one has a crystal ball and knows when rates will come down, so don’t wait to buy a house until they do. If you are ready to buy a house, you can continue with that process. The big thing, buy a house you can afford based on today's mortgage rates. DO NOT overbuy a house thinking you will be able to refinance and lower your payment in the future. You must plan for rates to stay high for a while, so keep your payment affordable based on what we know today.

If you can refinance in the future, that will be a bonus. But don't base your financial plan on a potential future lower rate. Ideally, your payment is 25% or less of your take-home pay. The bank will approve you for more, but buying a less expensive house will reduce your risk of being house poor.