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5 big reasons to lock in a mortgage rate right now
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The past few years have been rough for prospective homebuyers. As mortgage rates climbed in tandem with the Federal Reserve’s benchmark rate, many would-be buyers found themselves in a holding pattern, watching from the sidelines as they waited for the right time to enter the market. And, that decision may have seemed even more prudent when mortgage rates touched on 8% in October 2023 — the highest they’d been in over two decades.
However, recent shifts in the economic landscape have begun to change this calculus. Inflation is showing signs of cooling, and we’re seeing a corresponding dip in mortgage rates. This trend is largely driven by anticipation of a future rate cut by the Federal Reserve — which is now expected to slash rates just one time in 2024.
But that Fed rate cut may not happen for a few more months. And, you may not want to wait until the Fed rate cut to make your move anyway. It could make more sense to get started and lock in a mortgage rate right now instead.
Find out what today’s top mortgage rates are right now.
5 big reasons to lock in a mortgage rate right now
Here are a few reasons why locking in your mortgage rate now might be a smart move:
Mortgage rates are at a four-month low
The average 30-year fixed mortgage rate currently stands at 6.77%, the lowest it’s been in four months. This represents a significant drop from the recent peak of above 8%. For prospective buyers, this decrease could translate to substantial savings over the life of a loan.
To put this into perspective, on a $300,000 mortgage, the difference between an 8% rate and a 6.77% rate is about $260 per month. Over a 30-year term, that adds up to savings of nearly $94,000. This dramatic difference underscores why many buyers who were priced out of the market just a few months ago may now want to reconsider their options.
Explore your best home loan options and start the preapproval process today.
Waiting could be risky
While the current trend in mortgage rates is encouraging, it’s important to remember that the economic landscape can shift quickly. Inflation, which has been stubbornly persistent recently, could still potentially tick back up. If this happens, we could see mortgage rates climb again.
And, the Federal Reserve has indicated that it plans to keep interest rates elevated until inflation is firmly under control. While many economists predict a rate cut will happen in 2024, the timing and extent of these cuts remain uncertain. By locking in a rate now, you protect yourself against potential future increases, should they occur.
Home inventory remains limited in most markets
While some markets have seen improvements in inventory, the availability of for-sale homes remains tight in many areas. And, if mortgage rates continue to drop, more buyers are likely to enter the market, which could further exacerbate inventory issues.
In a low-inventory environment, desirable properties often receive multiple offers and sell quickly, which could make it tough to land a contract on a home. But by securing a mortgage rate now, you put yourself in a position to act swiftly when you find a home that meets your needs. This could be crucial in competitive markets where even a day’s delay might mean missing out on a property.
Future refinancing is an option if rates drop further
One concern some buyers have about locking in a rate now is the possibility of missing out if rates continue to fall. However, it’s important to remember that refinancing is always an option if rates decrease significantly in the future.
While refinancing does come with some costs, these are often outweighed by the potential savings if rates drop substantially. And, by locking in now, you secure a rate that works for your current budget while maintaining the flexibility to take advantage of potentially lower rates in the future.
There’s potential for future appreciation
While no one can predict the future of the housing market with certainty, historical trends show that real estate tends to appreciate over time. And, that’s been especially true over the last few years, as the lack of home inventory has helped home values climb substantially — vastly increasing the amount of equity the average homeowner has in their home.
And, by locking in a mortgage rate and purchasing a home now, you can start building home equity now. Each monthly mortgage payment you make lowers the amount you owe on your loan, thereby increasing your equity.
Should home values continue to climb, that will only add to the equity equation. But even if home prices remain stable or see modest declines in the short term, the long-term trend has typically been upward, so it likely won’t hurt to start the process now.
The bottom line
While the decision to buy a home is deeply personal and depends on your circumstances, the current economic conditions present a compelling case for locking in a mortgage rate now. After all, the combination of lower rates, limited inventory and the potential for future market changes creates a window of opportunity for those who are prepared to act.
However, it’s crucial to approach this decision with careful consideration. Your financial situation, job stability and long-term plans should all factor into your decision. Remember, the goal isn’t just to buy a home, but to do so in a way that aligns with your financial goals and lifestyle needs.
Frito-Lay is recalling a limited number of 13 oz. bags of Lay’s Classic Potato Chips after being alerted by a consumer contact that the product may contain undeclared milk.
The bags of chips affected by recall were distributed to certain retail stores and e-commerce distributors in Oregon and Washington and were available for sale beginning Nov. 3, 2024.
“Those with an allergy or severe sensitivity to milk run the risk of a serious or life-threatening allergic reaction if they consume the recalled product,” the Food and Drug Administration said in the recall notice posted Thursday.
No allergic reactions related to the recall have been reported, according to the recall. Additionally, no other Lay’s products, flavors, sizes or variety packs are affected.
FDA
The recalled chips include Lay’s Classic Potato Chips, in flexible 13 oz. (368.5 grams) bags with UPC code 28400 31041, a “Guaranteed Fresh” date of 11 Feb 2025, and one of either two manufacturing codes: 6462307xx or 6463307xx.
General guidelines from the FDA advise consumers who have purchased any recalled food to dispose of the product or return it to the retailer for a full refund.
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What is the debt ceiling? Here’s why Trump wants Congress to abolish it before he takes office
Washington — President-elect Donald Trump, Vice President-elect JD Vance and billionaire Elon Musk blew up a GOP-backed deal to fund federal agencies into March, raising the pressure on Republican congressional leaders to craft a plan to avert a government shutdown just before the holidays.
In a statement Wednesday, Trump and Vance lambasted the agreement for including provisions favored by Democrats. But the incoming president and vice president also added a new, significant wrinkle to negotiations when they urged Congress to raise or abolish the debt ceiling now, instead of next year.
“Increasing the debt ceiling is not great but we’d rather do it on Biden’s watch,” Trump and Vance said in their statement. “If Democrats won’t cooperate on the debt ceiling now, what makes anyone think they would do it in June during our administration? Let’s have this debate now.”
What is the debt ceiling?
Set by Congress, the debt ceiling, or limit, is the maximum amount of money the U.S. Treasury is authorized to borrow to pay debts incurred by the federal government. Lifting the debt ceiling does not authorize new spending, but instead lets the government spend money on obligations that Congress has already been approved.
Failing to address the debt ceiling could lead the U.S. to default on its debt, which would have devastating effects on the economy. The government has never defaulted, and the Treasury typically uses accounting moves, known as “extraordinary measures,” to delay breaching the debt ceiling.
While raising the debt ceiling used to be routine, legislation addressing it has in recent years been used as leverage to force policy concessions and fuel debates over government spending.
Congress last addressed the debt ceiling in June 2023 as part of a legislative package negotiated by President Biden and then-House Speaker Kevin McCarthy. That deal suspended the debt ceiling through Jan., 1, 2025, ensuring any fight over it would take place after the 2024 elections.
The Treasury Department will likely implement extraordinary measures to stave off a default in the new year. It will also announce an “X date,” the estimated point at which the government will no longer be able to pay its obligations. The Economic Policy Innovation Center, a conservative think tank, projected in an analysis released Monday that it’s possible the debt limit will be reached by June 16.
While the Treasury Department’s use of extraordinary measures would give Congress more time to address the debt ceiling, Trump is now urging lawmakers to take action now, before he takes office.
Why does Trump want to raise the debt ceiling?
The president-elect will come into office with a legislative to-do list that includes securing the border and extending provisions of his signature Tax Cuts and Jobs Act, which was enacted in 2017 and overhauled the tax code. But a fight over the debt ceiling could complicate efforts by the Republican-led House and Senate to focus on those legislative initiatives and pass them quickly.
Trump is urging lawmakers to eliminate the debt ceiling altogether, a position that some prominent Democrats have endorsed in the past.
“Number one, the debt ceiling should be thrown out entirely,” Trump said in a phone interview Thursday with CBS News’ Robert Costa. “Number two, a lot of the different things they thought they’d receive [in a recently proposed spending deal] are now going to be thrown out, 100 percent. And we’ll see what happens. We’ll see whether or not we have a closure during the Biden administration. But if it’s going to take place, it’s going to take place during Biden, not during Trump.”
Trump separately told ABC News that “there won’t be anything approved unless the debt ceiling is done with,” indicating any spending deal to prevent a shutdown must address the debt limit.
“If we don’t get it, then we’re going to have a shutdown, but it’ll be a Biden shutdown, because shutdowns only [injure] the person who’s president,” he told ABC News.
Whether Republicans and Democrats would go along with such a plan, though, is far from clear. GOP lawmakers in both chambers have opposed raising the debt ceiling without spending reforms, and debates over the debt limit often give way to broader fights over the federal budget, which conservatives in Congress have said is bloated and should be reduced. Plus, Democrats still control the Senate and the White House.
White House press secretary Karine Jean-Pierre said in a statement Wednesday that shutting down the government would harm families and endanger services Americans rely on.
“Republicans need to stop playing politics with this bipartisan agreement or they will hurt hardworking Americans and create instability across the country,” she said. “President-elect Trump and Vice President-elect Vance ordered Republicans to shut down the government and they are threatening to do just that — while undermining communities recovering from disasters, farmers and ranchers, and community health centers.”
House Democratic Leader Hakeem Jeffries suggested Democrats would not go along with a plan pushed by Republicans to raise the debt limit.
“GOP extremists want House Democrats to raise the debt ceiling so that House Republicans can lower the amount of your Social Security check. Hard pass,” the New York Democrat wrote on the social media platform Bluesky.
Jeffries also told reporters “the debt limit issue and discussion is premature at best.”