What You Need to Know About Mortgage Rates This Week: August 28, 2023
Mortgage rates are a key factor in determining how much you can afford to pay for a home. But they are also influenced by many economic and market forces that can change from week to week. Here’s a quick overview of what’s happening with mortgage rates this week and what it means for you:
- Mortgage rates are still high, but they may stabilize or decline later this year if inflation cools down1.
- The average rate for a 30-year fixed mortgage was 7.57% on August 25, down slightly from the previous week, but still near a 22-year high23.
- The Fed raised its benchmark interest rate by 0.25% in July, and may do so again in September, to keep inflation under control4.
- The median price of an existing home reached $410,200 in July, the second-highest level ever recorded, and up 8.5% from the previous quarter.
- Existing home sales fell 3.3% in July, as all four major U.S. regions saw lower sales compared to a year ago1.
- The housing market remains tight and competitive, as demand outstrips supply and inventory remains low.
How does this affect you as a potential or current homeowner? It depends on your goals and circumstances. Here are some questions to think about:
- How long do you plan to live in your home? If you’re looking for a long-term investment, securing a fixed-rate mortgage now may be a smart move, as rates are unlikely to drop significantly in the near future. If you’re looking for a short-term or flexible option, an adjustable-rate mortgage may offer lower initial rates, but be ready for possible rate increases later on.
- 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 more affordable 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: Current Mortgage Rates for Aug. 25, 2023: An Important Rate Eases
4: Mortgage Rate Forecast August 2023 | Bankrate
3: Mortgage Rates Surge to a 22-Year High, but We See a ‘Glimmer of Optimism’ Ahead
: Real Estate Market Outlook August 2023 – National Association of REALTORS®
: Housing Market Predictions For 2023: When Will Home Prices Be Affordable Again? – Forbes
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