If you're thinking about buying a home or securing a loan, now is a great time to take advantage of the current low-interest rates. However, it's crucial to plan ahead for potential future rate changes.
Mortgage rates have dropped below 7%, with loan applications rising by 11% and new home construction up by 11.4%. Between January and February 2024, U.S. residential building permits increased by 15%, showing strong market demand. Many buyers are capitalizing on these low rates to secure financing.
That said, as the Federal Reserve continues to reduce its balance sheet, liquidity could tighten, which might push rates higher and increase the cost of homeownership. The Fed has projected rates could rise above 7.5% by 2025, so the risk of higher rates remains a concern.
In the short term, low rates could continue driving demand, but if the Fed continues its tightening policies, there’s still a chance rates could rise. Buyers should consider locking in loans at these lower rates while also being mindful of potential repayment challenges if rates increase in the future.
For more details, visit LiaisonUS Mortgage.
