If you are in the market for a new home or looking to refinance, you have probably been watching mortgage rates closely in recent weeks. Rates have been falling steadily. Here are the current rates as of the day of this writing, September 17th:
| Type | Current rate | Last week’s rate | Change |
| 30-year fixed | 6.24% | 6.46% | -0.22% |
| 15-year fixed | 5.47% | 5.66% | -0.19% |
| 5/1 ARM | 5.50% | 5.59% | -0.09% |
| 30-year fixed jumbo | 6.28% | 6.46% | -0.18% |
For reference, the 30-year fixed loan rate was averaging 6.52% on August 31st. Back in January, it was 7.26%. So, it has fallen quite a ways.
Mortgage Rates Dropping in Response to Cooling Labor Market
You might be looking for some context to better understand the falling mortgage rates. For that understanding, we can look to the job market. The most recent jobs report listed an unemployment rate of 4.3% for August. The July unemployment rate was 4.2%, so we have seen a 1% increase. Employers in August only added 22,000 jobs.
In the meantime, inflation has been continuing to rise. Increasing costs put a burden on consumers, but also on companies.
Inflation is one of the factors that is suppressing job formation. Others include the challenges companies are facing due to tariffs, the possibility of an impending recession, and uncertainties about what the future will bring in general.
Rate cuts are a method used to try and offset a cooling job market. That is why we are seeing lower interest rates, including for mortgages.
Advantages of Low Mortgage Rates for Homebuyers
Between inflation and the job markets, there are a lot of challenges to navigate right now. But the drop in mortgage rates presents an opportunity for people looking to invest in a home.
The lower your mortgage rate, the less you will need to pay each month on your home loan. This has a number of benefits:
- You might be able to afford to buy a home sooner.
- You may be able to purchase more home than you would have been able to otherwise.
- If you choose not to buy a larger or more upscale home, you could just enjoy having some extra flexibility in your monthly budget.
- Another option would be to put more money toward paying off your principal, which would result in paying off your mortgage more quickly.
A lower mortgage rate also can have some psychological benefits. Buying a home may seem less daunting, and you will likely feel less financial stress over the long term with that lower interest rate.
Advantages of Low Mortgage Rates for Homeowners
If you already own a home, here are some advantages to refinancing at a lower rate:
- You can stop paying a higher interest rate, and take advantage of the same low rate as people buying a home today.
- Homeowners with high interest debts have a chance to roll them into their mortgages, saving money and streamlining their financial lives.
- This is an opportunity to make other changes to the mortgage if desired. For example, if you have an adjustable rate mortgage, but prefer a fixed rate mortgage, you can switch when you refinance. You can also make the loan term shorter or longer.
Buy a Home or Refinance in Virginia
First Residential Mortgage can help you buy a home with a competitive mortgage rate, or refinance to a more affordable rate. If you are ready to begin, please give us a call at (540) 838-5868 to schedule your consultation. We can help you purchase or refinance in Blacksburg or anywhere in VA.
