This Week Ahead: Mortgage Rates August 28, 2023

If you’re thinking about buying or refinancing a home, you may be wondering how mortgage rates are doing this week. Here’s a summary of what you need to know:

• Mortgage rates have remained high overall, but if inflation drops later this year, they could go down¹.
• The average for a 30-year fixed rate mortgage was 7.39% on August 25, the highest level in more than two decades².
• The Fed resumed rate hikes at its July 26 meeting, and may raise rates again in September to curb inflation³.
• The median existing-home sales price broke through $400,000 for the first time in 2023, hitting $410,200 in July¹.
• Existing monthly home sales dropped 3.3% in July, with all four major U.S. regions posting year-over-year sales declines¹.
• The housing market remains competitive due to strong demand and tight inventory supply⁴.

What does this mean for you as a homebuyer or homeowner? It depends on your situation and goals. Here are some questions to consider:

• How long do you plan to stay in your home? If you’re looking for a long-term investment, locking in a fixed-rate mortgage now may be a good idea, as rates are unlikely to fall substantially anytime soon. If you’re looking for a short-term or flexible option, an adjustable-rate mortgage may offer lower initial rates, but be prepared for possible rate increases in the future.
• How much can you afford to pay each month? Higher mortgage rates mean higher monthly payments, so you may need to adjust your budget or look for a cheaper home. You can use our mortgage calculator to estimate how much you can borrow and how much your payments will be.
• How much equity do you have in your home? If you’re refinancing, having more equity can help you qualify for a lower rate and save money on closing costs. You can also use your equity to cash out some funds for other purposes, such as debt consolidation or home improvement.
• What are your credit score and debt-to-income ratio? These factors affect your ability to get approved for a mortgage and the rate you’ll pay. The higher your credit score and the lower your debt-to-income ratio, the better your chances of getting a favorable deal. You can check your credit score for free and take steps to improve it if needed.

The bottom line is that mortgage rates are still high compared to historical averages, but they may not stay that way forever. If you’re ready to buy or refinance, it may be wise to act sooner rather than later, before rates go up even more. But don’t rush into a decision without doing your homework and comparing offers from multiple lenders. You want to make sure you get the best mortgage for your needs and budget.

Sources:

¹: Current Mortgage Rates: August 28, 2023 | Rates Stabilize

²: Mortgage rates for August 28: Another Fed rate hike on the way?

³: Mortgage Rate Forecast August 2023 | Bankrate

⁴: Housing Market Predictions For 2023: When Will Home Prices Be Affordable Again? – Forbes

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