When you buy a home, one of the key factors that determines affordability is your mortgage rate. There is good news for homebuyers in Oakhurst and throughout California. Mortgage rates have just dropped to their lowest point in 3 years. That means this is a good window for buying a home.
Mortgage Rates are as Low as They’ve Been in 3 Years
The average rate for a 30-year fixed-rate mortgage has reached 6.06%. The last time the rate was that low was back in September 2022. The year-over-year decrease between January of last year and January of 2026 is also significant. Last year at this time, the rate was 7.04%.
The current administration is preparing for the midterms. So, they have made the Federal Housing Finance Agency purchase $200 billion in bonds from Fannie Mae and Freddie Mac. This, together with a favorable CPI Inflation Report, has resulted in the decrease in mortgage rates.
What 3-Year Mortgage Rate Lows Mean for Homebuyers in CA
The difference year-over-year between 7.04% and 6.06% is almost 1%. Buying a home now at the same price that you would have bought it for last year with 1% lower interest would mean:
- You could save hundreds of dollars a month in interest.
- You might save tens of thousands of dollars over the lifetime of your mortgage.
Here are some more ways that you can benefit financially from a more affordable mortgage rate.
- Flexible monthly finances: Even if you could have afforded to buy a home at a higher rate, it might have been hard to manage your monthly finances. With hundreds of dollars freed up by a lower rate, you now have more financial ability to either save or spend on other things you need. You could even put some of that money into investments, building your personal wealth more rapidly than you could have otherwise.
- Make extra mortgage payments: Many people choose to put their extra money each month toward extra mortgage payments. Even with small extra payments on a regular basis, you may be able to pay your mortgage off early. Make sure to specify you want the payments to go toward the principal, not interest.
- Pay less interest over the loan term: You won’t owe as much interest over the lifetime of my mortgage if that term ends up being shorter because you were able to finish paying it off early.
- Buy a home without waiting: Being able to buy a home immediately benefits you in many ways. It may be convenient for work, give your family the space you need, or remove the need to pay rent. You’ll also be building equity. If your dream home is on the market, you don’t have to miss out on your chance to make it your own.
- Lock in predictable monthly payments: Choosing a fixed interest rate for your mortgage ensures that you will be paying the same interest rate for the entire loan term.
Timing Your Home Purchase
One challenge can be timing when to buy. We do not know if interest rates will continue to drop, or if they will go back up. Home prices are expected to go up in most locations, however. So, it may be more affordable to buy now either way. You can refinance to a lower interest rate in the future if rates keep dropping after you purchase.
Remember, the longer you have your equity, the more it can gain in value if your home’s value rises.
There may be other reasons to buy a home immediately as well. You may have just found your dream home, or you could have logistical reasons to move right away. Maybe you just do not want to rent anymore, and are excited to finally own a place that you can truly call your own. If so, this may be an ideal time to buy.
Buy a Home in Oakhurst or Beyond
Granite West Funding is based in Oakhurst. We work with homebuyers and homeowners throughout CA. If you want to buy a home or refinance, taking advantage of competitive mortgage rates, please give us a call at (559) 540-2275 to schedule your consultation.
