Mortgage Rates are Dropping…Is This a Good Thing?

Love Silhouette /
Love Silhouette /

Mortgage rates were in the two percent range while President Trump sat in the Oval Office. Since Biden took the reins, the rates have been skyrocketing.

Buying a home has been an expensive undertaking in the past few years. Not only have home prices risen in many metropolitan cities but the rates themselves have been high.

In 2020, rates were at about 2.5% for a 30-year fixed mortgage. Now, the rates are closer to 6.5%. Depending on the cost of the home, that can add hundreds if not thousands to the monthly mortgage payment – a cost that many American families simply cannot afford.

There’s good news on the horizon, though.

Mortgage interest rates have been falling for three consecutive weeks. This places them at the lowest they’ve been since February.

Combine this with the fact that home prices are starting to drop and home ownership is suddenly a possibility for many.

The 30-year fixed rate, according to US News & World Report, is currently at 6.92%. The 15-year fixed is 6.12%. And there are also various ARMs (adjustable rate mortgages) available.

There’s still one problem. While it’s slowly becoming more affordable to buy, the inventory of homes is extremely low. People simply aren’t putting their homes on the market – and part of that is because it’s becoming a buyer’s market again instead of a seller’s market.

If you’ve considered buying a home, you may still want to wait.

According to the chief economist for Zillow, Skylar Olsen, “Homeowners aren’t giving up their current house and low monthly payments to join a tight, expensive market.”

Perhaps things will be better in another few months. And they’re likely to improve considerably if you can hang in there long enough to see Biden booted from the White House.