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.
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