Why homebuyers should lock in a mortgage rate now
Waiting to lock in a mortgage rate could be a big mistake. Getty Images/iStockphoto
Purchasing a home is one of the most significant financial decisions most people will make. And, that’s certainly true right now, as a shortage of for-sale inventory, coupled with consistent demand from buyers, has caused home prices to remain elevated in many markets.
And, mortgage rates have been climbing for over a year now due to numerous Federal Reserve rate hikes, which has only added to the financial hurdles that many borrowers face. Plus, the average 30-year mortgage loan rate increased again this week, hitting 7.23% — the highest its been since 2000.
But while rates may be high, buyers should still seriously consider locking in a mortgage rate sooner rather than later. Below, we’ll break down why now may be the time to lock a rate in.
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Why homebuyers should lock in a mortgage rate now
There are a few different reasons it makes sense to lock in a mortgage rate right now, despite rates hovering above 7% on average. Here are a few reasons you may want to consider it:
Rates could increase in the future
Mortgage interest rates are influenced by a range of economic factors, including inflation, Federal Reserve policies and overall market conditions. Historically, rates have shown a tendency to fluctuate, and while they’ve already increased significantly this year, there’s a chance they could climb even higher in the future.
By locking in a mortgage rate now, you can shield yourself from the potential rate hikes down the road. This can provide you with peace of mind, knowing that even if rates rise, your mortgage interest rate will remain unchanged. And, given the impact that higher rates have on your monthly mortgage payments, this proactive step can save you a substantial amount of money over the life of your loan.
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Refinancing is always an option if rates drop
One of the advantages of locking in a mortgage rate now is that, should rates drop significantly in the future, you still have the option to refinance your mortgage loan. When you refinance, you replace your existing mortgage with a new one at a lower interest rate, leading to reduced monthly payments and long-term interest savings.
By locking in a rate today, you’re protecting yourself against potential rate increases while keeping the door open for refinancing if rates become more favorable. And, you’re also not passing up on homes that fit what you want or need in hopes that rates will drop. That’s a big benefit in today’s market, considering that housing inventory is still lacking in most markets.
Why furniture got so bad
September 5, 2023 at 7:00 a.m. EDT
(Illustration by José L. Soto/The Washington Post; iStock))Comment on this storyComment
No one expects an Ikea bookcase or West Elm sofa to last for generations, or maybe even to survive another move. But walk into a vintage furniture store and you’ll find all types of old pieces that were inexpensive and mass-produced in their day, yet have still managed to achieve heirloom status.
Furniture isn’t what it used to be. Fifty or 60 years ago, people thought of it as something they’d have for life — a dresser that a grown kid could take to college, a dining table where future grandchildren would have Thanksgiving. Today? Not so much.
Modern consumers are often all too happy to ditch last year’s Wayfair shipment for whatever new trend is sweeping their social media feeds. At the other end of that cycle is an industry relying on cheap labor and flimsy materials to fatten profit margins and keep prices down.
Even higher-end chains aren’t always a safe bet. Michael Brotman has designed for several of them, but he recently quit Big Furniture to open his own studio. Of one past employer, he says: “Without giving away any secrets, their margins are high and their quality is not good at all. I had a big discount working there — I didn’t buy anything.”
To understand the decline in quality, first consider what most furniture is actually made of. In the mid-20th century, the more affordable stuff was typically made domestically of American plywood — i.e., thin layers of wood glued together — while fancier pieces might be solid cherry or oak, and could be made in the United States or come from Italy or Denmark. Today, most of what’s on the market consists of Chinese-made press board and plywood, while pieces marketed as “solid wood” might be rubber wood with glued-on veneer.