Are Interest Rates Dropping?

Now, over the past 30 days, we’ve seen interest rates dropping. Now, this is interesting considering that literally just three, four months ago, interest rates were hitting all-time high.

Conventional loans were hitting high sevens, even into the eight percentage points. On VA loans, which is what we do primarily, we were seeing interest rates get up close to 7%. Pretty darn wild.

But over the past 30-40 days, we’ve seen interest rates recede dramatically, and that’s a big benefit for a lot of us. So, we want all our agents and the folks looking out, they’re buying right now.

This video is being shot early December 2023, so things always change in the future, but just know that if you’ve been looking at homes the last month or two and rates have felt very high, they’ve pulled back a bit.

So, we’re looking at rates where they were three to five months ago, which is really wonderful. So, if you happen to have taken out a VA loan say three to five months ago, your interest rate on a VA loan, let’s say was maybe around seven and a half percent, something like that, you now are getting close to having that opportunity to do an interest rate reduction, or finance loan streamlined refi. We have plenty of videos on that.

If you stepped out of the market, we have a lot of clients that just stepped out as rates kept pushing up, conventional especially, it was getting up there in the mid-sevens. I know some lenders are even up in the eights.

Now, we have the chance to step back in as conventional rates are pulling down. We’re seeing low sevens, even high sixes on conventional loans, which is just wonderful. So, know that right now, interest rates are pulling back a bit, hopefully can get you back out there to go buy a home.

But here’s the other thing, why is that?

Well, the FED has come out pretty clear and said, “Hey, we’re right now positive rates for the foreseeable future.” And there’s even been some talk about cutting them in the next year, in 2024.

So, that’s got some folks excited.

Personally, don’t get your hopes fully up for that, but there’s a good chance that we’re just going to hold where we’re at because economic data has come in a little bit softer.

You never want to wish for bad news, but right now, the bad news is making it so the rates are holding and actually coming down on mortgages, which is pretty darn powerful for us, especially in the real estate and the mortgage business.

So, know that rates have pulled back from those all-time highs that we were talking about just a couple of months ago, and now we’re kind of how we were a little bit earlier this year. Hopefully, gives people some breathing room.

We’re starting to see some more consistency in the FED decisions, which is making people calm down a bit.

Investors are getting more comfortable with buying mortgage-backed securities, which is helping decrease the mortgage spread between a 10-year Treasury and mortgage rates.

That’s essentially a lot of jargon for saying, “Hey, rates are coming back down a bit. Let’s go out there and win some homes.” My name’s Evan Kaufman, your loan originator. Take care.