Are Mortgage Rates Dropping in 2023?

Will Mortgage Rates Drop in 2023?

Although mortgage rates soared to an all-time high since 2008 earlier this year, they may not stay high forever. In fact, according to a recent article published by Business Insider, mortgage rates are somewhat dwindling. In the past week, mortgage rates plummeted, which is good news for buyers!

The Federal Reserve raised interest rates in response to the rise of inflation and an unsteady economy across the country in the hopes that it would stop the spread. Experts predict that since inflation is decelerating, we may see mortgage rates decrease in 2024. For the average American, budgeting for a mortgage is hard enough, and budgeting with high interest rates can seem impossible. Especially considering the fact that the cost of groceries and utilities were soaring this year! 

Is it Worth it to Refinance My Mortgage as Rates Drop?

That depends. If you’re locked in at a good rate and your payment is manageable, it may not be in your best interest to refinance your mortgage. According to Investopedia, however, the rule of thumb is that if you can realistically decrease your current rate by at least 1%, then it could be an option on the table. 

Refinancing your interest rate to a lower rate can allow you to have more disposable income. Or, if your payment is lower, you can continue to pay your previous monthly amount in order to pay your loan down faster. The choice is up to you!

How Much Should I Budget for My Mortgage?

Again, the answer to this question depends on your current financial situation and your ability to handle your mortgage payments. What makes sense for another buyer may not make sense to you or your current budget! 

However, a general rule of thumb is that you should not spend more than 30% of your monthly gross income on housing. While that can seem impossible when the cost of living is increasing throughout the country, it is a goal that you should be aiming for as a buyer on the hunt for a new home. 

Now that Mortgage Rates are Dropping, Is Now a Good Time to Buy a Home?

If you were on the fence about getting a new home due to high interest rates, now may be the time to start searching for a new place to live! And if you need a Realtor on your side, residents of Encinitas and SoCal can trust Linda Moore to take the lead.

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