Mortgage Rates Fell 4 Weeks Straight. Friday Decides Next
Mortgage Rates Fell 4 Weeks Straight. Friday Decides Next
Here is a bit of good news for once. Mortgage rates have fallen four weeks in a row. Freddie Mac's weekly survey put the average 30-year fixed rate at 7.24 percent on October 29, down from 7.32 percent the week before, and Zillow's daily average hit 7.07 percent on November 3, down 16 basis points in a single week, according to The Mortgage Reports and Norada Real Estate. After a year where rates mostly went one direction, up, that is a real shift in mood.
Now here is the part that matters for you. This dip has an expiry date, and it might be Friday. The October jobs report lands Friday morning at 8:30 a.m. Eastern, and The Mortgage Reports flags it as the week's high-importance event for mortgage pricing. A strong report gives the Federal Reserve more reason to keep rates where they are, or push them higher at its December meeting, and mortgage rates would follow. A soft report keeps the easing going. Either way, the market will move on it.
I am not waiting for a lower rate, and neither should you
I get the temptation to sit tight and hope for 6 percent. I have heard it from sellers all year. But the people paid to forecast this stuff are not backing that play. Mortgage Bankers Association chief economist Mike Fratantoni says the MBA does "not expect any significant relief in mortgage rates over the forecast horizon," and the MBA expects rates to stay above 7 percent through 2027. Fannie Mae's forecast is no kinder, sitting at 7.4 to 7.5 percent through next year.
And here is the number that should settle it for you. Zillow senior economist Kara Ng estimates the difference in a buyer's monthly payment at today's rates versus next year's forecast rate is just $26, as reported by Money. Twenty-six dollars a month. That is what waiting is worth, on paper, if the forecasts are even right. Meanwhile your house sits, your carrying costs keep running, and a buyer who could have bought today finds something else.
What this window means if you are selling now
Buyers have been picky all autumn. Pending home sales fell 11.3 percent year on year in September, and the median existing home still sells for about $417,500. Your buyer is doing the monthly math before they fall in love with anything. A rate dip, even a small one, is what tips a fence-sitter into making an offer.
So use the window while it is open. Price off the payment, not off what your neighbour got last spring. Run your asking price through our mortgage calculator at today's rates and look at what your buyer actually pays each month. If that number works, your price works. If it does not, no amount of staging fixes it.
And be ready to move fast. If Friday's report comes in hot, the dip could unwind in a day, and the buyers who were warming up go cold again. A listing that is live, priced right, and easy to view catches the buyers who are acting now. A listing you are still "getting ready" catches nobody.
My take
I have stopped trying to pick the bottom of the rate market, because nobody I trust can pick it either. What I do know is this: a buyer who can afford your home at 7.07 percent is a real buyer, today, with real money. A buyer who might afford it at 6.5 percent someday is a daydream. List for the buyer who exists. If you are ready to go, list your home with us and get in front of them while rates are cooperating for once.