Although the Federal Reserve raised interest rates even further, mortgage rates continued to move down. According to Freddie Mac, the rate on a 30-year fixed mortgage dropped to 6.09% from 6.13% the previous week. While there weren’t any big surprises from the Fed’s meeting, it seems that the market had already priced in the recent rate increase. With the Fed switching to smaller rate hikes, mortgage rates will likely be less impacted by the Fed’s rate increases in the following months.
There is finally a light at the end of the tunnel for many Americans as they now earn more than the income needed to purchase a mid-priced home. With rates falling below 6.1%, many Americans earn annually about $5,000 more than the qualifying income. However, first-time homebuyers are still missing about $30,000 in order to qualify for a starter home. While rates are not expected to fall back to 3%, these buyers could look for less expensive homes at a price point of around $220,000 if they don’t want to be cost-burdened and go over their budget.