August Mortgage Rate Update & Should You Buy/Refi Now?

On The Market

BiggerPockets

Investing, News, Education, Business

4.8 • 858 Ratings

🗓️ 26 August 2024

⏱️ 30 minutes

🔗️ Recording | iTunes | RSS

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Summary

Mortgage rates are falling, but the Fed hasn’t made any rate cuts yet. What’s the deal? We’re explaining it all in this August mortgage rate update with repeat guest and lender-friend of the show, Caeli Ridge. Caeli fills us in on today’s mortgage interest rates, why rates are moving without any federal funds rate cuts happening, what could cause rates to go even lower, and whether paying points on your mortgage makes sense in the current market. Good news for investors: interest rates are getting into the high sixes for some rental property loans, but lower rates aren’t always a good thing. With the economy slowing down and inflation (thankfully) seeing some significant progress, unemployment is rising, and better interest rates may come at the cost of a worse economy. But this isn’t a surprise, no matter how unfortunate it is for many workers in today’s market. We’re getting Caeli’s take on the Fed’s next moves, today’s mortgage rates, and what’s in store for future rates. This is crucial commentary from a lender working on loan products for investors in today’s exact interest rate environment, and hearing her may change your next investing move. Dave also gives his opinion on the mortgage rates we could expect to see next year and whether buying or refinancing even makes sense now. In This Episode We Cover August 2024 mortgage rate updates and where investor interest rates are right now Why mortgage rates have been falling WITHOUT the Fed lowering their rates Paying mortgage points and whether or not it’s worth it if rates are continuing to fall The BIG uptick in refinancing and purchasing activity since rates began to fall Where Dave thinks mortgage rates could be next year And So Much More! Links from the Show Join the Future of Real Estate Investing with Fundrise Join BiggerPockets for FREE Find Investor-Friendly Lenders See Dave at BPCON2024 in Cancun! Dave's BiggerPockets Profile Caeli's BiggerPockets Profile With Mortgage Rates Falling, When Should Investors Refinance? Get Dave’s Mortgage Point Calculator Analyze Real Estate Like a Pro with “Real Estate by the Numbers” Jump to topic: 00:00 Intro 00:54 Mortgage Rate Update 04:43 Powell Talks, Rates Change 09:19 Bad News if Rates Fall 10:27 What Else Affects Rates 14:04 “Points Options” Improve 15:47 Advice for Investors 18:20 Dave’s Take on Future Rates Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-246 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	In the last few weeks, we've seen a mortgage rates move in a promising direction, but do we expect that trend to continue through the rest of the year?
0:08.0	Or might we see them bounce back up a little bit?
0:10.9	And how should investors be thinking about the current rate environment?
0:19.6	Hey, everyone, it's Dave.
0:21.1	Welcome to On the Market.
0:22.8	Today we are bringing on lender expert friend of the show, Shaley Ridge, who specializes
0:28.2	in helping investors find loans for their investment properties.
0:32.6	And today we're going to chat about what's going on with interest rates today.
0:35.4	We're going to try and decode what the Fed is doing.
0:38.4	And then at the end, I'm going to break down my conversation with Chaley and just give you some
0:43.4	personal insights or personal opinions about how I am handling this market with my own investing.
0:50.6	So make sure to stick around for that.
0:52.3	Let's bring on Chaley.
0:59.1	Okay. investing. So make sure to stick around for that. Let's bring on Chaley. Chaley Ridge, welcome back to On the Market. Mr. Dave, thank you for having me. Thank you.
1:03.8	You are such a reliable, great guest. We are so grateful to have you here today to fill us in on what is going on with mortgage rates.
1:12.7	So let's start with the basics. I would love for you to just fill in the audience on where
1:18.3	the federal funds rate sits today. And just as a reminder to our audience, federal funds rate,
1:23.2	it's not mortgage rates. It is the one more interest rate, excuse me, that our central bankers, the Fed can control. And although it is correlated closely with mortgage rates, they are not the same thing. We'll get into that a minute. But, Julie, where is the federal funds rate? So the easy answer is 5.25.
1:42.0	Okay. I like easy answers. Let's not get too complicated. Yeah.
1:46.2	And how does that compare to the average rate on a 30-year fixed rate mortgage? So I want to set the
1:52.7	stage. And you and I have talked about this a couple of times, Dave, just to quickly identify for
1:57.2	those listening. There's something called an LLPA, loan level price adjustment.
	...

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