Lower Mortgage Interest Rates: Good News for Your 2024 Purchasing Power in Suffolk County

If you’re in the market for a home in Suffolk County, New York and need to take out a mortgage to finance your purchase, you’re going to be highly interested in today’s mortgage rates. Why? Because even a small difference in mortgage interest rates, over time, can translate into thousands of dollars you’ll either pay or will save. Mortgage rates will also have a direct impact on your ability to secure a loan large enough to finance your dream home.

30-year mortgage rates have been increasing steadily since 2021, rising from under 3 percent to just almost 8 percent in October 2023. These rising rates have made it increasingly difficult for home buyers to secure adequate home loans. Fortunately, they appear to have peaked out and are now currently under 7 percent, according to Freddie Mac (see graph above).

This recent downward trend in rates is great news for buyers. As noted in a recent article in Bankrate, it is likely that the interest rate cool-off will make housing more affordable in 2024. According to Edward Seiler, AVP of Housing Economics and Executive Director of the Research Institute for Housing America at the Mortgage Bankers Association (MBA), “MBA expects that affordability conditions will continue to improve as mortgage rates decline . . .”

How Mortgage Rates Affect Your Plans to Buy a Home

Mortgage rates directly affect the amount of money you’ll need to pay each month to finance your home purchase, as well as the size of the mortgage you’ll be able to get. As you can see from the chart below, your ability to afford a home shifts markedly as rates rise or fall.

For example, let’s assume that your budget allows for a monthly mortgage payment between $2,400 and $2,500. With interest rates at 7.5 percent or higher, you’ll have no ability to secure a home loan of $360K or above. But as interest rates fall, higher loan amounts become available to you.

 

As you can see, even small changes in mortgage rates can affect your budget and the loan amount you can afford.

Experts Can Help You Understand Your Budget and Plan Ahead

It’s always a good practice to get guidance from a local real estate agent and a trusted lender when you’re searching for a new home. These professionals can help you explore different mortgage options, help you understand what makes mortgage rates go up or down, and explain how those changes will impact you as you go about searching for a new home.

Ready to discuss strategies for buying your next home? Team Rita has been serving Suffolk County in Long Island, New York since 2006. Give us a call for a free consultation. Let’s connect and plan your next steps.