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Here’s how much homebuyers will save if they wait for rates to drop
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Over the past few years, mortgage rates climbed steeply compared to the record-low days of the pandemic, and that — coupled with rising home prices and high inflation — has made for quite the challenge for hopeful homebuyers. Fortunately, though, that could be changing soon.
Inflation has been improving over the last three months, and mortgage rates dropped slightly in tandem. A lackluster jobs report then caused mortgage rates to dip even further, with rates hitting a 15-month low. But the Federal Reserve has also indicated a cut to its federal funds rate could be in the cards this fall, which would likely equate to even lower mortgage rates.
That, in turn, begs the question: Should homebuyers (or refinancers) wait it out for those rates to come to fruition? And if they do, how much could they potentially save?
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Here’s how much homebuyers will save if they wait for rates to drop
Here’s what experts had to say about homebuyers’ potential to save on a mortgage loan if they wait for mortgage rates to drop further.
Rates might not fall significantly
If the Fed lowers rates, it will reduce mortgage rates, too, experts say — but we may not see as big of a dip as some expect.
“Rates have already started falling ahead of a Fed rate cut. The economy is slowing down, which lowers inflation. As inflation drops, so do mortgage rates,” Debra Shultz, vice president of lending at CrossCountry Mortgage’s The Shultz Group, explains.
But just how low will they go? That’s less clear.
The Fed is likely to reduce its rate by only a small amount at the start — about 25 basis points to 50 basis points (so 0.50% to 0.25%). In fact, the CME Group FedWatch Tool, which predicts future Federal Reserve moves, has the chances at about 50-50 for its September meeting. This could mean an equally small decline in mortgage rates, too.
Industry forecasts back that up. Fannie Mae currently expects the year to end with a 6.7% average rate, while the Mortgage Bankers Association predicts a slightly lower 6.6% average.
Beyond the end of the year, rates may fall further.
“I believe the slow and steady decline will continue into 2025, where we could see average rates drop by as much as 1% or more by the end of 2025,” says Darren Tooley, a loan officer and sales manager at Union Home Mortgage. “That would put average interest rates in the low 6% range and on the cusp of breaking beneath 6%.”
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It depends on your loan amount
While those 2024 rate cuts might not seem huge, even slightly lower mortgage rates can still help in the affordability department — especially if you need a larger loan amount. Between today’s low housing supply and rising prices, this might be the case for many buyers.
“As home prices have climbed over the years, so has the average loan balance,” Tooley says. “What you can save by reducing the rate on your mortgage by 0.5% on a $450,000 loan is going to be much greater than the 0.5% savings on a $175,000 loan.”
He’s right: On a $450,000 30-year loan, the difference between a 7% rate and a 6.5% rate would save you about $150 per month and nearly $59,000 in long-term interest charges. On a $175,000 loan, the savings would be significantly lower: $58 per month and about $21,000 in interest.
Trying to time your purchase isn’t always best
If you can wait until 2025, when mortgage rates are potentially even lower, the savings may grow. MBA predicts a 6.2% rate by the end of next year, while Fannie Mae’s forecast is at an even 6%.
“There’s no way of knowing how low rates will go,” says John Aguirre, a mortgage broker at Loantown.
There’s also a chance that lower rates drive much higher demand from buyers — which would drive up home prices in tandem. This could make waiting it out a moot point.
“Buyers have been sitting on the fence waiting for rates to fall the last few years,” Shultz says. “There’s a lot of pent-up demand, but low inventory. As rates fall, more buyers will enter the market, and hello competition. You’ll see more bidding wars, which will drive up prices.”
For this reason, experts generally don’t recommend trying to time the market and instead recommend focusing on when the timing is right for your budget and lifestyle needs. If the number works, pull the trigger. You can always refinance later if rates drop.
After days of uncertainty, the Federal Aviation Administration announced Sunday that SpaceX had been cleared to press ahead with the planned Monday launch of the European Space Agency’s $398 million Hera asteroid probe, stormy weather permitting.
With forecasters calling for an 85% chance of thick clouds and showers that would trigger a delay, Hera’s launch atop a Falcon 9 rocket from pad 40 at the Cape Canaveral Space Force Station is targeted for 10:52 a.m. EDT Monday. The forecast is 75% “no-go” if launch is delayed to Tuesday.
“The last hurdle is the weather. So, please, please, I need you to do something about it!” Hera project manager Ian Carnelli joked with reporters Sunday. “It’s the only thing I really cannot control. … It looks like we have some opening around the time of launch, but it’s really impossible to say at the moment.”
ESA
Hurricane Milton, meanwhile, poses threats throughout the week as the cyclone is expected to cross the Florida peninsula Wednesday and move out over the Atlantic Ocean near Florida’s Space Coast.
Launch of NASA’s $5.2 billion Europa Clipper mission, which had been planned for Thursday from the Kennedy Space Center, has been put on hold pending passage of the storm.
“The safety of launch team personnel is our highest priority, and all precautions will be taken to protect the Europa Clipper spacecraft,” said Tim Dunn, a senior launch director with NASA’s Launch Services Program.
“Once we have the ‘all-clear’ followed by facility assessment and any recovery actions, we will determine the next launch opportunity.”
Likewise, the return to Earth of three astronauts and a Russian cosmonaut aboard a SpaceX Crew Dragon ferry ship has been delayed by predicted bad weather.
Crew 8 commander Matthew Dominick, Mike Barratt, Jeanette Epps and cosmonaut Alexander Grebenkin, launched to the International Space Station last March. They had planned to undock Monday, returning to Earth to close out a 217-day mission.
National Weather Service
But NASA announced Sunday their departure would be delayed to at least Thursday because of expected bad weather. Crew Dragon ferry ships require calm winds and seas in the Gulf of Mexico or the Atlantic Ocean to permit a safe splashdown.
As for the Falcon 9, the FAA clearance only applied to the Hera launch while the agency continues overseeing an investigation into what caused a Falcon 9 second stage to malfunction Sept. 28 and miss its targeted re-entry point into Earth’s atmosphere over the Pacific Ocean.
SpaceX routinely sends spent second stages into the atmosphere for destructive breakups at the end of their missions to prevent possible collisions or other problems that might add to the space debris already in low-Earth orbit.
The FAA wants to make sure the problem is understood and corrected so future re-entries are carried out as planned, ensuring any debris that survives re-entry heating will splash down harmlessly in targeted ocean impact “footprints,” well away from shipping lanes and populated areas.
The second stage being used for the Hera mission will boost the space probe into deep space, using all of its propellant in the process. It will not return to Earth, so a malfunction, should one occur, would pose no safety threat.
“The FAA has determined that the absence of a second stage reentry for this mission adequately mitigates the primary risk to the public in the event of a reoccurrance of the mishap experienced with the Crew-9 mission,” the agency said in a statement, referring to the most recent Falcon 9 flight.
NASA
“Safety will drive the timeline for the FAA to complete its review of SpaceX’s Crew-9 mishap investigation report and when the agency will authorize Falcon 9 to return to regular operations,” the statement concluded.
The FAA did not address plans to launch the Europa Clipper atop a Falcon Heavy rocket Thursday for its long-awaited mission to Jupiter and its ice-covered moon Europa.
Like the Hera mission, the Clipper’s upper stage, the same one used for all Falcon-family rockets, will not return to Earth. Instead, it will burn all of its propellants to accelerate the probe to an Earth-escape velocity of 25,000 mph.
But FAA clearance to proceed, assuming it comes in time, likely will be a moot point, at least in the near term. It is unlikely the Clipper and its Falcon Heavy rocket will be moved to the Kennedy Space Center launch pad until after Milton has passed through the area.
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Rep. Mike Turner says all “candidates need to deescalate” after Trump assassination attempts
Rep. Mike Turner, an Ohio Republican who chairs the House Intelligence Committee, responded Sunday to Eric Trump’s implication that his father’s Democratic opponents were responsible for the attempts on former President Trump’s life, saying the innuendo was “of course” inaccurate but political candidates on both sides of the aisle “need to deescalate” their rhetoric.
“No, of course not,” Turner said in his latest appearance on “Face the Nation with Margaret Brennan,” after being asked whether he believes there was truth to claims made by the former president, his son Eric, and his vice presidential running mate, Sen. JD Vance, at a rally where each either implied or suggested Democrats tried to kill him.
Trump returned Saturday to Butler, Pennsylvania, to speak to supporters gathered at the Butler Farm Show fairgrounds, the site of the July 13 assassination attempt against him. A gunman facing Trump on the podium at that rally opened fire into the crowd, grazing Trump’s ear, killing one attendee and injuring two others, according to authorities. The gunman was killed by a Secret Service sniper, officials said.
Another apparent assassination attempt happened in September when a suspect pointed a gun in Trump’s direction on the Florida course where he was playing golf. The FBI has opened probes into both incidents.
CBS News
Trump, his son and Vance all acknowledged the assassination attempt in Butler at Saturday’s campaign event.
“Over the past eight years, those who want to stop us from achieving this future have slandered me impeached me indicted me tried to throw me off the ballot and, who knows, maybe even tried to kill me,” said the former president, while Eric Trump claimed his father’s political opponents “tried to kill him, and it’s because the Democratic party, they can’t do anything right.”
Vance, in his remarks, addressed Trump’s Democratic challenger in the presidential race, Vice President Kamala Harris, and suggested that the Republican nominee “took a bullet for democracy.”
Brennan asked Turner: “You don’t mean to imply here anything that would suggest Eric Trump’s allegations that Democrats are trying to kill him?”
“No, of course not,” Turner responded. “But I do think that Vice President Harris needs to actively state and acknowledge that her administration is saying a foreign power, which would be an act of war, is actively trying to kill her opponent.”
The attempts on Trump’s life came after a citizen of Pakistan with ties to Iran was arrested and charged with allegedly planning a murder-for-hire scheme targeting Trump, among others. Although the timing of the charges coincided with the first attempt, there was no indication that the two incidents were related.
Turner criticized Harris for what he viewed as a failure to openly condemn the alleged plot.
“I think there’s certainly a role for her to play and for the president to play in this, in both identifying that there are threats against Donald Trump that need to be acknowledged and responded to, to deter,” he said. “I think all the candidates need to de-escalate, certainly in their language.”
But the congressman did acknowledge that a Biden-Harris Justice Department official, Matthew Olsen, the head of the national security division, said the U.S. government has been “intensely tracking Iranian lethal plotting efforts targeting former and current U.S. government officials — and that includes the former president.”
“I would say that we are very concerned — gravely concerned — about Iranian plotting,” Olsen told CBS News in a recent interview.
Hurricane Milton rapidly intensified into a Category 1 storm on Sunday, and it has set its path on Florida’s Gulf Coast.
Forecasters predict Milton will make landfall around the Tampa Bay area on Wednesday, bringing with it upwards of 120 mph winds and drenching an area still reeling from Hurricane Helene.
As of 2 p.m. ET on Sunday, Milton was centered about 290 miles west-northwest of Progreso, Mexico, and about 815 miles west-southwest of Tampa. It had maximum sustained winds of nearly 80 mph and was inching north-northeast at 6 mph.
Path of Hurricane Milton
A map from the National Hurricane Center shows Milton continuing to strengthen into a major hurricane as it approaches Florida’s western coast.
“Milton is forecast to rapidly intensify during the next couple of days and become a major hurricane on Monday,” forecasters said.
NOAA/National Hurricane Center
The storm is expected to remain north of Mexico’s Yucatan peninsula, with heavy rainfall expected as Milton makes its way northeast toward Florida. Tropical storm watches are currently in effect from Celestun to Cancún, Mexico.
NOAA/National Hurricane Center
The hurricane center said hurricane and storm surge watches could be issued for parts of Florida later Sunday.
Florida officials prepare for more impact
Florida Gov. Ron DeSantis said Sunday that while it remains to be seen just where Milton will strike, it’s clear that Florida is going to be hit hard. “I don’t think there’s any scenario where we don’t have major impacts at this point,” he said.
“You have time to prepare — all day today, all day Monday, probably all day Tuesday to be sure your hurricane preparedness plan is in place,” the governor said. “If you’re on that west coast of Florida, barrier islands, just assume you’ll be asked to leave.”
NOAA via AP
DeSantis expanded his state of emergency declaration Sunday to 51 counties and said Floridians should prepare for more power outages and disruptions, making sure they have a week’s worth of food and water and are ready to hit the road.
The Federal Emergency Management Agency, meanwhile, coordinated with the governor and briefed President Biden Sunday on how it has staged lifesaving resources.
“I highly encourage you to evacuate” if you’re in an evacuation zone, said Kevin Guthrie, executive director of the Florida Division of Emergency Management. “We are preparing … for the largest evacuation that we have seen, most likely since 2017, Hurricane Irma. “
As many as 4,000 National Guard troops are helping state crews to remove debris, DeSantis said.
“All available state assets … are being marshaled to help remove debris,” DeSantis said. “We’re going 24-7 … it’s all hands on deck.”
