BOZEMAN – Mortgage rates have now dropped to below 4.5%, which is lower than they have been for the last year and a half.
“I really expected rates to be a lot higher than where they are,” said loan officer Brett Hyde. “To see them where they are is a good sign. I think it will keep our housing market moving, where we are right now and it opens that door for those first time home buyers.
Hyde said around the fall of 2018 those rates were over 5%, making it even more of a seller’s market.
“As those rates go up, as our prices increase, buying power decreases. Especially for the first time home buyers. So hopefully with this shift, it will open it up for a few more people,” said Hyde.
Does this small of a decrease really make that much of an impact? CEO of Gallatin Association of Realtors Steve Candler said the difference is huge. For example, he said from his research, if someone was to buy a $300,000 home with 3% down at a 4.0% interest rate the mortgage would be close to $30,000 cheaper at 4% instead of 5%. On top of that, the buyer will also be able to purchase a larger property.
“So if you are at a 4% instead of 4.5%, that is another $24,000 to qualify for a house,” said Candler. “So not only is your payment less if you get less of an interest rate but you qualify for more house. That is why it is really important, the shift in interest rates.”
For the first time in a while, the median home price was also down for the month of February, also advantaging buyers.
Reporting by Mederios Babb for MTN News