Home Mortgage Interest Rates Are Dropping Again

Are you still sitting on the fence about buying a new home? Well, hop off that uncomfortable perch. Home mortgage rates are dropping again. Despite all the predictions last year that we’d be up to more than 5% by now, the rates have turned in the opposite direction. With this latest interest rate drop, Homes By Taber asked our lending partner, Great Plains Bank, for insight into home financing, interest rates, and the right time to buy a home. Here’s what you need to know.

Last year at this time, economists were certain that rates were going to go up. The only variable was how much those numbers would rise. In all fairness, their estimation wasn’t totally out of line, since rates climbed throughout 2018. At the time, The Federal Reserve still forecasted 2 or 3 more rate hikes in 2019.

Then, in November 2018, The Federal Reserve had a change of heart and decided to pause the quarterly rate hikes. But the rates didn’t just stay where they were. They actually declined, from 4.81% in November to 4.55% in December for a 30-year fixed rate mortgage. And that pattern has continued through 2019 thus far.

In the Oklahoma City area, we’re currently looking at 3.75% for a 30-year fixed rate FHA mortgage, 3.375% for 20 years, and 3.125% for a 15-year home loan.

How much does this difference make? 

If you were to buy a $275,000 home right now at 3.75% and put 20% down, your monthly mortgage payment would be $1,373 (including insurance and taxes). At 5% interest rate, that payment becomes $1,535. The difference of $162 per month adds up to $1,944 per year and $58,320 over the 30-year term of the loan. This is just an example, and you can use Zillow’s handy mortgage calculator to plug in your own numbers.

According to our friends at Great Plains Bank, there are many factors that contributed to the rate drop, but the bottom line is that it’s a plus for homebuyers! Although the general feeling is that The Federal Reserve will not raise rates again this year, we’ve learned from experience that you can’t rely on predictions.

Get off the fence

What you can count on is that remaining stagnant from indecision is going to cost you. Home prices will keep going up, even though interest rates have gone in the opposite direction. You’ll pay more for a home in 6 months than you will today. The cost of materials, combined with rising tariffs, contributes to a necessary increase. Even though a new construction home delivers far greater long-term value than a resale home (and will continue to do so), you’ll pay more by pondering the move instead of making it.

Homes By Taber has a wide selection of move-in ready homes in our communities in the most desirable Oklahoma City neighborhoods and suburbs: Edmond, Deer Creek,  Norman, Moore, Mustang, Piedmont, and Yukon. Prices start in the low $200,000s, and include our “Proudly Overbuilt” higher standard for standard features—for starters, storm shelter, air filtration system, tankless water heater, energy-efficient systems and appliances, choice of granite or quartz countertops, outdoor wood-burning fireplace, fully sodded yard and sprinkler system with smart home irrigation controller, jetted tub in the master bath, ceiling fans in all bedrooms and living areas, and the structural integrity of a footing and stem foundation. There’s a lot more to our list of included features, and it adds up to $75,250—costs that other builders consider to be upgrades. We include them in our price, so be sure to compare!

Taber LeBlanc has always believed in quality construction, start to finish, and giving our homebuyers the quality they deserve for their investment and their trust in us. Expand that value by leveraging the low home loan interest rates available right now! Even if you would rather build than buy one of our move-in ready homes for sale, you can lock in your interest rate now. Stop hesitating. Contact Frankie Lewis and get started!