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Facts: The 30-year fixed mortgage rate from Freddie Mac continued with small incremental declines to 6.87% over the last week from 6.95%. At 6.87%, with 20% down, a mortgage payment on the median-priced existing home of $400,000 is $2,101. Last year, the median downpayment for a first-time buyer was 8%; with these metrics, the typical monthly payment would be $2,416.
Positive: The CPI has eased somewhat, but the Fed still has a long way to go before cutting interest rates. However, the Fed has left the door open for one rate cut in 2024, which could assist housing affordability.
Negative: For today's housing consumers, limited inventory remains even though there is slightly more inventory than last year. If rates come down, more buyers will inevitably join the home-buying market, which could result in bidding wars. Timing a market based only on interest rates may not yield fruitful results.
