People buying homes today are paying $200/month less for the same home than those with bad timing who purchased at peak rates

  • The current average interest rate for a 30-year mortgage is 6.13%, according to Freddie Mac data.
  • This means that rates are now down a full percentage point from the November peak of 7.08%.
  • One homebuyer told Insider that he’s excited to get back in the market because of falling rates.

How much can one really save on a mortgage that’s just one percentage point lower? It turns out that it’s enough to bring shoppers off the sidelines and back into the market.

Rapid home price growth and soaring mortgage rates led to a dramatic downturn in housing demand throughout the fall and winter months of 2022. But as softer economic data encourages the Federal Reserve to slow the pace of its rate hikes — which were largely responsible for last year’s surge in borrowing costs — mortgage rates are trending lower and enticing more buyers to return to the US housing market.

A buyer who purchased a home at the national median price of $393,682 in November 2022 with a peak mortgage rate of 7.08% would be paying $1,914 each month on a 30-year fixed-rate mortgage (after putting 20% cash down at closing). However, if a buyer purchased that same home in November at today’s average mortgage of 6.13%, they’d be looking at a payment of $2,112. That’s a difference of nearly $200 each month.

Given today’s steep cost of living, that extra cash could go a long way for the typical working family. The savings potential — combined with a market where sellers are feeling more demoralized — is a major reason why many Americans feel that now is a great time to purchase a home.

Home shopper Jason Wilson, 32, is looking to take advantage of lower interest rates to finally close on that dream home. 

Wilson and his wife currently live in a highrise condo in Chicago’s Lincoln Park neighborhood. He said they want to move into “something closer to the ground” like a townhouse or single-family home where they can raise children someday. 

“We’re really trying to purchase a home so we can take the next step in life,” Wilson said. “We want to be in this home for the next five, seven, or maybe even 10 years, and obviously interest rates will change over that time. It’s something we’re watching very closely.” 

Wilson added that they are looking for homes in the $700,000 to $800,000 range, which could carry an average mortgage payment of between $4,800 and $5,600, according to’s mortgage calculator. If they had bought a similar home just a few months ago when mortgage rates were closer to 7%, their mortgage payments would have been roughly $6,000 per month. 

Wilson told Insider that the couple plans to save the additional funds for expenses such as childcare or doctor’s visits once they have children. They might also do some renovation projects like adding a back patio, depending on the home they buy. 

“It’s really great timing for us,” Wilson said. “We’re ready for a bigger home and interest rates are starting to fall. Listings are starting to tick back up, too. It’s really exciting.”

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