Changing home market

(NORTHWEST WASHINGTON)- A significant drop in home mortgage rates is positive for both buyers and sellers, according to a leading Northwest Washington real-estate broker.

According to Mortgage News Daily, the average rate on a 30-year fixed mortgage dropped 16 basis points to 6.29% on Friday, Sept. 5, following the release of an August employment report that was weaker than expected. The 30-year fixed rate has been gradually declining since hitting a peak of 7.08% in May.

“Mortgage rates are now hovering right around the low 6% range,” said Kena Brashear, co-owner and designated broker for The Muljat Group in Bellingham in a news release. “Conversations with local lenders suggest we’ll likely stay in this range -- possibly brushing the 6% line but not quite dipping into high 5% rates unless there’s a major shift in the bond market or Federal Reserve outlook.”

For buyers, Brashear said even a small drop in rates makes a real difference in affordability. It can open the door to a higher price point or simply lower the monthly cost of homeownership. For sellers, she said a friendlier rate environment can bring more buyers back into the market, though price sensitivity is still very real.

To illustrate the impact, Brashear used the example of a $600,000 home purchase with 20% down (a $480,000 loan). When 30-year fixed rates were at 7%, the monthly principal and interest payment for the buyer was $3,193. At a 6.29% interest rate, the monthly principal and interest payment is about $2,968. At an even 6%, that payment drops to $2,878. When compared to a 7% loan, that’s a savings of about $315 a month, or nearly $3,800 a year.