Mortgage rates have fallen to their lowest averages in eight months, and as word gets out, more potential home buyers may come off the sidelines, real estate pros say.
“The problem is that volatility is the obstacle,” Sam Khater, Freddie Mac’s chief economist, told The Wall Street Journal about expectations of fluctuations in mortgage rates over the next few months.
The 30-year fixed-rate mortgage fell to a 4.51 percent average last week, which matches the lowest average since last spring, according to Freddie Mac’s weekly mortgage market survey. Mortgage rates are still higher than a year ago—when they were 3.95 percent—but rates have steadily fallen from nearly 5 percent this fall.
Higher mortgage rates in 2018 were blamed on dampening home sales and prompting affordability concerns among would-be buyers. Stock market swings and higher home prices also took the blame.
But as mortgage rates fall, some real estate professionals say they’re seeing buyers step back into the housing market to take advantage of the savings. Tami Pardee, founder of Halton Pardee & Partners in Los Angeles, told WSJ that her firm had seven homes go into escrow just one week before Christmas, which is typically one of the slowest times of year. “I think people are worried that rates are going to go really high,” she says.
Brian Benjamin, president of Two River Mortgage in Red Bank, N.J., told WSJ that after his buyers, who had been sitting on the sidelines, saw how much they could save with the lower mortgage rates, they actively resumed their search.
“Hopefully as the news gets out that mortgage rates have fallen, it will get those on the fence to accelerate their looking,” Benjamin says.