In January, the average 30-year fixed mortgage rate reached 7.26%, which was the peak for the year. Since then, mortgage rates have been dropping. By August 31st, the average was down to 6.52%. By September 17th, it had reached 6.24%.
This is a moment of opportunity for Ohio homebuyers and homeowners who want to save.
Reasons Why Rates are Falling
We’ll discuss the benefits of lower mortgage rates shortly. First, let’s take a look at the reasons why mortgage rates have been dropping so you understand the current economic situation.
Right now, inflation is high. So is uncertainty about what businesses can expect in the coming months and years. Along with those challenges, businesses also are contending with tariffs. And even before this year, companies were embracing practices such as frequent layoffs, outsourcing, and using AI to reduce their human staff.
What does all of this have to do with mortgage rates? Lowering interest rates can help to rebalance the economy when the job market is suffering. So, that is what the Fed has been doing.
Benefits of Lower Mortgage Rates for Homebuyers
High mortgage rates in recent times were pricing a lot of homebuyers out of the market. But many of these homebuyers can afford to buy a home with today’s lower rates.
Some homebuyers may also find that with lower mortgage rates, they have the option of purchasing a larger house, or one in a better neighborhood, or a more luxurious home.
Maybe you decide not to upgrade, however, and to purchase a more modest home. If so, the advantage of a lower mortgage rate is having more room in your budget. You can save money each month, or even make additional payments toward your mortgage principal. You might be able to pay it off sooner.
Regardless, your lower mortgage rate means that over the lifetime of your home loan, you will spend less money on interest.
Why Homeowners Should Think About Refinancing
The lower mortgage rates we are seeing right now are not just good news for homebuyers, but for homeowners too. Homeowners whose mortgage rates are higher than the current rates should consider refinancing.
When you refinance, you can lock in today’s rate. If you choose a fixed rate mortgage, that will be your rate for the rest of your mortgage term. If you pick an adjustable rate mortgage, you should still see a drop in your rate (including a low introductory rate), though after a few years, your rate will be based on market rates.
Speaking of which, if you want to change the format of your mortgage, or even the type of mortgage, you can do that while you are refinancing. You might have a chance to drop PMI, depending on your situation. Homeowners with high interest debts can look into rolling those into their new mortgage too.
If you need more time to pay off your home loan, you can refinance to a mortgage with a longer term. If you want to pay it off early, you can refinance to a home loan with a shorter term. We can go over your options during your consultation.
Lock in Competitive Mortgage Rates in Ohio
It is hard to say what the future will bring. But for now, homebuyers and homeowners can take advantage of some of the lowest mortgage rates we have seen in a while. We are based in Columbus, and can help you buy a home or refinance at today’s mortgage rates anywhere in Ohio. To get started, lease give us a call at (614) 505-0620.
