Why Mortgage Rates Are Driving Affordability
Freddie Mac has recently reported the average 30-year fixed mortgage rate dropping to record lows, reaching the lowest point in the history of the survey, which dates back to 1971 (See graph below):
What does this mean for buyers?
This is huge for homebuyers. Those currently taking advantage of the increasing affordability that comes with historically low interest rates are winning big.
According to Mortgage News Daily:
“Those shopping for a home can afford 10 percent more home than they could have one year ago while keeping their monthly payment unchanged. This translates into nearly $32,000 more buying power.”
A lower monthly payment means savings that can add up significantly over the life of your home loan. It also means you may be able to purchase more home for your money. Maybe that’s a bigger home than what you’d be able to afford at a higher rate, an increasingly desirable option considering the amount of time families are spending at home today.