Mortgage rates remain higher than they were a year ago, but rates took a breather during the month of March, according to a recent report by the National Associaiton of Home Builders.
Based on data obtained from the Federal Housing Finance Agency (FHFA), it appears mortgage rates fell 6 basis points in March to 4.12 percent. That’s still up from the October 2016 low of 3.54 percent, but experts still deem these rates to be optimal for those looking to purchase a home.
“Even though rates are up from last year, they are still really low,” said Brad Moore, area manager/mortgage loan officer with BancorpSouth in Tuscaloosa. “With the rates trending upward people who were undecided are now taking advantage of low rates while they are still available and buying the house they always wanted, but now they are feeling the pressure more than ever to act before it is too late.”
The NAHB report also said new home sales ticked up in March by 5.8 percent. Since October, new home sales are up 9.3 percent, the report said.
Moore said lack of inventory in the market could be a driving factor for more new home sales.
“Builders know that the inventory is low and are starting to build/develop new neighborhoods,” Moore said. “Often times custom builders don’t carry the construction loan and construction financing falls on the buyer. The plus about building is the buyer decides what type of house they build. With inventory being low, buyers are frustrated with the lack of options. Why wait when you can build exactly what you want now?”
Moore said for those looking to take advantage of the current rates, whether with new or existing inventory, home buyers need to go through the preapproval process in order to know what kind of product they need to be looking for.
“To better prepare, I would always advise getting preapproved and knowing what you can afford before you start the buying process,” Moore said. “Often times people think they need to sell their house before they buy and that isn’t always the case. Also, knowing what loan product, term, etc. fits you the best helps in making the correct and comfortable decision. Not to mention it provides for a stronger offer when a buyer has a preapproval letter in hand.”
