If you’ve been waiting for mortgage rates to drop, the good news is that it is already happening. Recently, rates reached an important milestone, dipping into the 5 percent range for the first time in about three years.
Today, rates are sitting in the low 6 percent range, and experts expect them to remain near this level throughout the year.
Here’s why this matters for you as a homebuyer.
Why Current Rates Are Such a Big Deal
A mortgage rate affects more than just the interest you pay on a loan, it shapes your entire homebuying experience.
Just a year ago, when rates were around 7 percent, many buyers felt priced out. Higher payments and tighter budgets made affordability a real challenge, especially for first-time homebuyers.
Now that rates are gradually coming down, the market is starting to shift. Borrowing costs are at their lowest level in nearly three years, and that can change the homes you can realistically afford.
At 6 percent or below, buyers can expect:
- Lower monthly payments: On a $400,000 home, payments are more than $300 less compared to a 7 percent rate.
- More buying power: Extra breathing room in your budget allows you to make a stronger offer, consider more locations, or purchase a home with more features.
In short, lower rates open up opportunities that weren’t available when rates were higher, giving you a real advantage in today’s market.
This Opens the Door for 550,000 Buyers
To show just how much this benefits homebuyers, consider research from the National Association of Realtors (NAR). When mortgage rates are around this level, millions more households can afford a home. At 6 percent or below:
- 5.5 million more households can afford the median-priced home
- About 550,000 of those households are likely to buy a home within the next 12 to 18 months
This is not just speculation. It represents pent-up demand finally getting the chance to move. Right now, you have the opportunity to act before more buyers notice that the market has shifted.
Whether rates stay in the low 6 percent range or dip into the high 5s, the math is already working in your favor. The difference between a low 6 percent and a high 5 percent rate is small, but the drop from 7 percent to 6 percent is a significant change, and it is already giving you an advantage.
An Important Call Out
Mortgage rates don’t exist in isolation. Home prices, local inventory, property taxes, insurance, and your personal finances all play a role in what you can afford.
A rate in this range doesn’t mean every home will fit every buyer. That’s why getting pre-approved and reviewing your numbers with a trusted lender is so important.
Even so, this rate environment brings more buyers into the market than we’ve seen in years. If buying wasn’t an option for you before, now is a great time to take another look.
Bottom Line
Mortgage rates reaching a three-year low is more than just a headline.
For many buyers, rates at this level can be the difference between staying on the sidelines and finally getting the keys to a new home.
If you’ve been waiting for a reason to recheck your numbers and explore your options, this is it. Let’s break down what today’s rates mean for your budget and buying potential. Get in touch with us!
