ARKANSAS, USA — The COVID-19 pandemic has had a significant impact on the housing market, and since then, experts have been paying particular close attention to the constant ups and downs in mortgage rates.
“It’s been in the spotlight because when interest rates were so low it was just hysteria,” said Mark Phillips, a senior mortgage banker. “Everyone wants to buy and everyone wants to sell because prices have gone up. People were able to borrow money very cheaply.”
However, this trend did not last long as mortgage rates rose to a 21-year high in August.
Currently, those interest rates are falling.
“Three weeks, a month ago, it was very easy for someone to score an 8 or a little bit higher,” Phillips said. “Now we’re back to the August-September range.”
Phillips said the rate is about 7%, which may not seem like a huge increase from 8%, but it does make a difference.
“It makes a huge difference in affordability,” Phillips said. “Interest directly impacts your payments and overall budget.”
Phillips says first-time home buyers need to keep this in mind.
“There are so many different programs out there, and as long as you fall within a certain range of those programs, your rates can be a little bit lower,” Phillips said. “Some down payment may be required.”
Real estate executive broker Tamra McMahon agreed with Phillips.
“If it makes financial sense and the monthly payments are where they need to be, why not buy a house?” McMahon said.
Mr McMahon said these lower interest rates meant more options in the market.
“More people are going to sell the home they wanted and buy an upgraded version of it,” McMahon said. “I think we’re going to see a little bit more demand, especially as this year ends and the holiday season ends. We’re going to see a lot more activity.”
Phillips said he wouldn’t be surprised if mortgage rates remained flat.
“I would be surprised if there were more rate hikes in the near future,” Phillips said.