A housing development in Middlesex, Pa., is shown on Friday, March 29, 2024. Holding out for more attractive mortgage rates could give homebuyers some financial breathing room.– Shop for a home now or hold out for the possibility of lower mortgage rates? That question is confronting many home shoppers this spring homebuying season.
Hegde, 29, worries that delaying his search would eventually put him up against others also looking for lower rates in a market that’s already plenty competitive. The rock-bottom mortgage rates that fueled a buying frenzy in 2021 and early 2022 are long gone. While an average rate on a 30-year home loan of just under 7% is not far from the historical average, that’s little consolation to homebuyers who, prior to the last couple of years, hadn’t seen average rates this high going back nearly two decades.
Many economists expect that mortgage rates will ease this year, but not before inflation has cooled enough for the Federal Reserve to begin lowering its short-term interest rate. They’re not feeling any urgency, but they are eager to avoid a surge in competition should mortgage rates decline in the coming months.
Home shoppers also have more properties to choose from this spring than a year ago. Active listings -- a tally that encompasses all the homes on the market but excludes those pending a finalized sale -- have exceeded prior-year levels for five straight months, according to Realtor.com. They jumped nearly 24% in March from a year earlier, though they were down nearly 38% compared to March 2019.
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