Mortgage Rates Drop to Lowest Level in 18 Months: What This Means for You

If you’ve been holding off on buying a home, now might be the perfect time to act. Mortgage rates have just dropped to their lowest point in over a year and a half, offering you a significant opportunity to secure a better deal on your next home purchase.

Even a small drop in mortgage rates can lead to big savings on your monthly payment. But this recent decline is more than just a slight dip—it’s a significant drop. Sam Khater, Chief Economist at Freddie Mac, highlights the impact:

“Mortgage rates have fallen more than half a percent . . . and are at their lowest level since February 2023.”

How Lower Mortgage Rates Impact Your Monthly Payment

To see how much you can save, let’s break down the numbers. Imagine you’re purchasing a home with a $400,000 loan. The chart below compares the monthly principal and interest payments if you bought a house at April's peak mortgage rates (7.5%) versus buying now, with rates in the low 6% range.

This rate change can lead to a monthly savings of over $370. That's a substantial decrease in your housing costs—meaning more money in your pocket every month.

Why This Is a Great Time To Buy

With mortgage rates hitting a 1.5-year low, your purchasing power is stronger than it’s been in nearly two years. That means you could afford more home for your budget or reduce your overall monthly payment. Either way, this is a key moment to consider entering the housing market.

Bottom Line

Mortgage rates have dropped significantly, giving you more buying power than you’ve had in a long time. If you’re thinking about purchasing a home, now is the time to explore your options and take advantage of the savings. Let’s connect to discuss how you can make the most of these favorable conditions.