SANDY — Mortgage rates have hit their lowest level in nearly a year. According to Freddie Mac, the weekly average rate hit 6.58%, which hasn’t happened since October.
The drop has sparked an increase in mortgage applications nationally, but is it making any real impact on buyers in Utah’s difficult housing market?
Trevor Thompson, a real estate agent since 2005, has seen a lot over 20 years in the business. Lately, he’s been watching rates closely.
“We have been waiting for rates to come down in order to feel a boost in the market, which we haven’t quite felt yet,” Thompson said.
Mortgage rates hit historically low levels before they started rising in 2022, even brushing 8% in late 2023. Since then, rates have fluctuated, but they have been falling over the last several weeks.
“It’s been enough on the average-sized loan amount in Utah that would save somebody about $150, $175 a month,” said Lauren Patterson, a mortgage lender and board member of the Utah Association of Mortgage Professionals.
With the recent dip in rates, Patterson said he’s seen a small uptick in activity. Nationally, according to the Mortgage Bankers Association, mortgage applications rose 10.9% last week compared to the week before, with a lot of that driven by people interested in refinancing.
“Any payment relief that happens is good relief,” Patterson said.
But another lender, Al Bingham, said the market is still slow even with the recent dip in mortgage rates.
“It’s challenging,” Bingham said Friday. “A lot of homebuyers are looking into (a) purchase, and then they look at the numbers, and they tend to withdraw or back off.”
Bingham said this summer, for him, has been full of buyers cancelling their loans. He acknowledged the increase in mortgage activity nationally, but he said Utah is unique.
“We’re in a high-priced market here a little bit where … the affordability issue here in Utah is a big problem,” he said. “For a lot of new homebuyers, they just can’t afford that payment.”
What should buyers do?
While some buyers are waiting to get into the market, that could be a double-edged sword. Thompson said the market isn’t as competitive right now. But it will be, he believes, once rates really drop — whenever that is.
“That will be when they all run out and start shopping,” Thompson said. “You’re going to have a lot more competition to fight with as far as getting a house under contract.”
Patterson said if someone is looking to get into the housing market at some point soon, it pays to plan ahead.
“Get everything set up and in line so that if you do find the property that you’re looking for — or if it’s a refinance and you do see that rate come down to the point where it makes sense and you get a real net tangible benefit — then you can act very quickly,” Patterson said. “The people that are able to take advantage of these little rate windows are the ones that already have their loan in process and going.”
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