to celebrate it in this journey for your customers and communities.
Consider these stats: Almost 9 out of 10 homebuyers say homeownership makes them happy, and nearly 7 out of 10 renters believe having their own place would raise their quality of life. But we know it’s a tough time out there for buyers of all kinds, especially since it appears that no interest rate cuts from the Federal Reserve are coming anytime soon.
That’s why your Focus Title team put together this list of things to know about mortgage rates – which are separate but related to the one set by the Fed – and housing affordability.
Buying power matters right now. Even though the interest rate hasn’t moved yet, it’s important to remind buyers that mortgage rates fluctuate regularly. Those shifts don’t seem like much, but those tenths of a point can add up quickly. Our friends at Zillow used multiple U.S. cities to show how much more house someone could afford if their rate decreased by half a percentage point. While Milwaukee wasn’t highlighted, we’ll spotlight what the article says about another Midwestern community: Cincinnati. A “typical” home in this Ohio city costs about $270,800.
“At a 7% mortgage rate, your monthly payment would be $1,441. At 6.5%, it’s $1,369, or $72 less each month. Over 30 years, the difference would save you $25,919 in interest. If you budgeted $1,441 monthly for a mortgage payment, and the interest rate dropped half a percentage point — from 7% to 6.5% — you could spend $11,342 more on a home without increasing your monthly payment.”
Know that mortgage providers can offer different rates. We love our loan officer friends and know they are working hard to serve their customers and partners best. However, if you’re trying to buy a house, you should shop around and see if different financial institutions can offer you a better rate.
In fact, these recent findings reported that buyers could save tens of thousands of dollars over the lifetime of a loan by comparing rates. For Wisconsin buyers, overall savings could be more than $85,000, according to LendingTree. It’s worth repeating: every fraction of a point matters when it comes to an investment as big as your mortgage.
Refinancing is still a good future option. We know. Buyers are probably tired of hearing how refinancing is a good option down the road. Still, it remains true, especially since 84% of recent buyers said they planned to refinance in the future, according to a September 2023 survey.
How can we frame these conversations now? While it’s important to stress that rates haven’t fallen – and won’t decrease – as quickly as they spiked a couple of years ago, real estate professionals can still stress that refinancing remains a good long-term plan. After all, mortgages are a 30-year commitment, so there’s time to wait a little longer for the right opportunity.
Focus Title is here to be your trusted title and closing partner for Wisconsin buyers and sellers, no matter how hot the market gets this season. We’re always ready to be part of all your milestones. Reach out to us today!