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What homebuyers should (and shouldn’t) do as they wait for mortgage interest rates to drop
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If you were a homebuyer looking for a home last summer, you didn’t have many options for securing a cost-effective mortgage. Inflation was still high, the federal funds rate was elevated to its highest point in decades and mortgage interest rates had risen in tandem, growing to the highest level since 2000.
But things are changing.
Inflation has steadily cooled this year (it dropped for the fourth consecutive month in July) and multiple cuts to the federal funds rate, currently frozen at a range between 5.25% and 5.50%, appear imminent. Mortgage interest rates have already cooled in light of these developments, down by around a point from where they were toward the end of 2023. And they can and likely will fall further if the Federal Reserve takes action during their final three meetings of 2024.
Understanding this dynamic, then, homebuyers should consider taking some specific steps now while avoiding other, simple but easy-to-make mistakes. To that end, below we’ve gathered a list of what homebuyers should and shouldn’t do as they wait for mortgage interest rates to drop.
Start by seeing how low of a mortgage interest you could lock in here now.
What homebuyers should (and shouldn’t) do as they wait for mortgage interest rates to drop
While every buyer’s financial situation differs, many would benefit from taking a nuanced approach now. Here’s what they should (and shouldn’t) do:
Do: Shop around for lenders
To improve your chances of getting the lowest rate and most favorable terms, start shopping around for lenders now. But don’t just look at the rate as a low one could get eaten up by excessive fees, penalties and closing costs. Compare quotes from at least three different lenders to establish a baseline that you can use as rates fall.
Get started with an online marketplace that compares multiple lenders online today.
Don’t: Pass up on your dream home
If you find your dream home now and can afford the mortgage payments, even if they’re higher than you’d like to pay, buy it anyway. Most experts recommend an approach of “dating the rate and marrying the home.” In other words, today’s rates will drop in the future, so don’t get too hung up on paying slightly more to start. But that dream home won’t remain on the market forever and, if you wait, you could permanently lose the opportunity.
Do: Precisely calculate your budget
A home purchase, for many Americans, is the largest one they’ll make in their lives. It’s critical, then, to precisely calculate your budget in advance so you know exactly what you can and can’t afford. With rates seemingly changing every day, you should complete these calculations, both with the rates that are available now as well as with those that could be available at the time you’re ready to buy your home.
Don’t: Wait for the perfect rate
Waiting for the perfect rate could be a major mistake. Yes, mortgage interest rates are likely to fall, perhaps significantly, in the weeks and months to come. But the perfect one, or even rates in the 2% to 3% range that were readily available a few years ago, are highly unlikely to return soon, absent a major economic driver. So don’t wait for that to happen or you could be waiting (and renting) for a long time.
Do: Contact a real estate agent
An informed real estate agent could be the difference between you finding a home you love at a cost-effective price – and not. This is particularly true as the rate climate changes, which could complicate the homebuying process and drive up competition. In markets like the one buyers are entering now, a professional real estate agent could be well worth the minor percentage you’ll have to pay for their services at closing time.
Don’t: Overextend yourself
A home purchase can be rewarding in multiple ways, particularly with the security it offers you and your loved ones. But that reward can easily feel like a punishment if you overextend yourself financially. While a cooling interest rate environment may lead you to buy a more expensive home than you normally would, it’s important to avoid the temptation to overextend yourself and, instead, stick to the budget you’ve already precisely calculated.
Learn more about your current mortgage options here.
The bottom line
Cooling mortgage interest rates present an opportunity for millions of potential homebuyers now. To capitalize on this timing, however, they’ll want to make select moves in advance and avoid other ones as best they can. By doing so, they’ll better position themselves for financial success in a home they truly love.
Legislation to expand Social Security benefits to millions of Americans passed the U.S. Senate early Saturday and is now headed to the desk of President Joe Biden, who is expected to sign the measure into law.
Senators voted 76-20 for the Social Security Fairness Act, which would eliminate two federal policies that prevent nearly 3 million people, including police officers, firefighters, postal workers, teachers and others with a public pension, from collecting their full Social Security benefits. The legislation has been decades in the making, as the Senate held its first hearings into the policies in 2003.
“The Senate finally corrects a 50-year mistake,” proclaimed Senate Majority Leader Chuck Schumer, a Democrat from New York, after senators approved the legislation at 12:15 a.m. Saturday.
The bill’s passage is “a monumental victory for millions of public service workers who have been denied the full benefits they’ve rightfully earned,” said Shannon Benton, executive director for the Senior Citizens League, which advocates for retirees and which has long pushed for the expansion of Social Security benefits. “This legislation finally restores fairness to the system and ensures the hard work of teachers, first responders and countless public employees is truly recognized.”
The vote came down to the wire, as the Senate looked to wrap up its current session. Senators rejected four amendments and a budgetary point of order late Friday night that would have derailed the measure, given the small window of time left to pass it.
Vice President-elect JD Vance of Ohio was among the 24 Republican senators to join 49 Democrats to advance the measure in an initial procedural vote that took place Wednesday.
“Social Security is a bedrock of our middle class. You pay into it for 40 quarters, you earned it, it should be there when you retire,” Ohio Senator Sherrod Brown, a Democrat who lost his seat in the November election, told the chamber ahead of Wednesday’s vote. “All these workers are asking for is for what they earned.”
What is the Social Security Fairness Act?
The Social Security Fairness Act would repeal two federal policies — the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) — that reduce Social Security payments to nearly 3 million retirees.
That includes those who also collect pensions from state and federal jobs that aren’t covered by Social Security, including teachers, police officers and U.S. postal workers. The bill would also end a second provision that reduces Social Security benefits for those workers’ surviving spouses and family members. The WEP impacts about 2 million Social Security beneficiaries and the GPO nearly 800,000 retirees.
The measure, which passed the House in November, had 62 cosponsors when it was introduced in the Senate last year. Yet the bill’s bipartisan support eroded in recent days, with some Republican lawmakers voicing doubts due to its cost. According to the Congressional Budget Office, the proposed legislation would add a projected $195 billion to federal deficits over a decade.
Without Senate approval, the bill’s fate would have ended with the current session of Congress and would have needed to be re-introduced in the next Congress.
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Saturday is the winter solstice and 2024’s shortest day. Here’s what to know about the official start of winter.
The 2024 winter solstice, the shortest day of the year, happens on Saturday, Dec. 21, in the Northern Hemisphere. The celestial event signifies the first day of winter, astronomically.
What is the winter solstice?
The winter solstice is the day each year that has the shortest period of daylight between sunrise and sunset, and therefore the longest night. It happens when the sun is directly above the Tropic of Capricorn, a line of latitude that circles the globe south of the equator, the National Weather Service explains.
The farther north you are, the shorter the day will be, and in the Arctic Circle, the sun won’t rise at all.
How is the day of the winter solstice determined?
The winter solstice occurs because of the Earth’s tilt as it rotates around the sun.
When the Northern Hemisphere tilts away from the sun, the nights last longer. The longest night happens on the solstice because the hemisphere is in its furthest position from the sun. That occurs each year on Dec. 21 or 22.
This year, it falls on Dec. 21 at 4:21 a.m ET, to be precise.
On the summer solstice, when the northern tilt is closest to the sun, we have the longest day, usually June 20 or 21.
National Weather Service
The solstices are not always exactly on the 21st every year because the earth’s rotation around the sun is 365.25 days, instead of 365 even.
Will days start getting longer after the winter solstice?
Yes. Each day after the solstice, we get one minute more of sunlight. It doesn’t sound like much, but after just two months, or around 60 days, we’ll be seeing about an hour more of sunlight.
When will winter officially be over in 2025?
The meteorological winter ends on March 20, 2025. Then, spring will last until June 20, when the summer solstice arrives.
How is the winter solstice celebrated around the world?
Nations and cultures around the world have celebrated the solstice since ancient times with varying rituals and traditions. The influence of those solstice traditions can still be seen in our celebrations of holidays like Christmas and Hanukkah, Britannica notes.
The ancient Roman Saturnalia festival celebrated the end of the planting season and has close ties with modern-day Christmas. It honored Saturn, the god of harvest and farming. The multiple-day affair had lots of food, games and celebrations. Presents were given to children and the poor, and slaves were allowed to stop working.
Gatherings are held every year at Stonehenge, a monumental circle of massive stones in England that dates back about 5,000 years. The origins of Stonehenge are shrouded in mystery, but it was built to align with the sun on solstice days.
Andrew Matthews/PA Images via Getty Images
The Hopi, a Native American tribe in the northern Arizona area, celebrate the winter solstice with dancing, purification and sometimes gift-giving. A sacred ritual known as the Soyal Ceremony marks the annual milestone.
In Peru, people honor the return of the sun god on the winter solstice. The ancient tradition would be to hold sacrificial ceremonies, but today, people hold mock sacrifices to celebrate. Because Peru is in the Southern Hemisphere, their winter solstice happens in June, when the Northern Hemisphere is marking its summer solstice.
Scandinavia celebrates St. Lucia’s Day, a festival of lights.
The “arrival of winter,” or Dong Zhi, is a Chinese festival where family gathers to celebrate the year so far. Traditional foods include tang yuan, sweet rice balls with a black sesame filling. It’s believed to have its origins in post-harvest celebrations.
Researchers stationed in in Antarctica even have their own traditions, which may include an icy plunge into the polar waters. They celebrate “midwinter” with festive meals, movies and sometimes homemade gifts.