At GlobeLiveMedia we explain why mortgage interest rates could drop below 6% soon, according to Realtor. This would allow thousands of people in the US to buy a house.
Times have not been easy for consumers in the US housing market. The progressive increase in mortgage interest rates meant that thousands of people simply could not afford to buy a house. But now, mortgage interest rates are starting to creep down, and could even drop below 6%, according to Realtor.
George Ratiu, senior economist at Realtor, said he expects mortgage interest rates to decline in the coming months after seeing a tangible slowdown in inflation.
Just two months ago, mortgage interest rates had reached 7%. Now, they are, on average, at 6.33% for 30-year fixed mortgages, according to information from Freddie Mac.
This means, to put it in simple words and figures, that monthly mortgage payments are now under $2,000, which has brought relief to thousands of homeowners and buyers.
What is the reason why you can expect a drop in mortgage interest? The answer: the US Federal Reserve’s monetary policy appears to be paying off, as inflation eased again during December 2022.
According to the Bureau of Labor Statistics (BLS), inflation during the month of December was 6.5%, a percentage that is still high, but, undoubtedly, significantly less than the peak registered in the middle of from 2022, when it exceeded 9.1%, one of the highest inflation figures in the last 40 years.
Now that inflation seems to be subsiding (slowly but steadily), the Federal Reserve could ease interest rate increases, a monetary policy designed to curb inflation but which, collaterally, caused mortgage interest rates to rise.
When could US mortgage rates drop, according to Realtor?
“If inflation continues to fall at this rate, we could see mortgage interest rates below 6% by the end of February,” says Ratiu.
Again, everything depends on the behavior of inflation in the coming weeks.
Meet Bradley Gibbons, a successful real estate agent and author based in the United States. With over 10 years of experience in the industry, Bradley has a deep understanding of the local market and a proven track record of helping her clients buy and sell properties. She is known for her ability to connect with her clients and her extensive knowledge of the latest real estate trends.
In addition to her successful career as a realtor, Bradley is also an accomplished author. She has written several books on real estate, including “The Insider’s Guide to Buying a Home” and “Selling Your Property: A Step-by-Step Guide.” Her books are praised for their practical advice and easy-to-understand language, making them valuable resources for both experienced and first-time home buyers and sellers.
Bradley is also a frequent speaker at industry events and a regular contributor to real estate publications. In her free time, she enjoys traveling and spending time with her family.