Surprising mortgage rate drop draws attention of potential home buyers

Spring home buying season

SHREVEPORT, LA (KSLA) - An unexpected drop in mortgage loan rates in 2019 has led to big changes in expectations for springtime home sales.

Analysts had predicted mortgage rates would rise this year, potentially up to 5.25 percent.

Instead, since mid-November the 30-year fixed rate has steadily dropped, even reaching nearly 4-percent at one point last week.

Patrick Axford, a mortgage lender with Citizen's Bank explained that the rate drop can help with buying power, at least somewhat.

But he added that it does not eliminate the need to qualify by having the appropriate debt-to-income ratio.

"If you make a thousand dollars a month, for easy math, you can have about $450 in total debt," started Axford.

"That would include the new house payment, your car notes, student loans, credit card; anything that's reporting on your credit report."

Shreveport realtor Hayli Cagle told us that rate drop is making a good housing market even better locally.

"With the rates the way that they are, I mean it's never not a good time to buy. And there's, we, we stay busy. We're busy." (laugh)

Cagle explained that it's not just buyers who can also benefit from the dip in mortgage rates, but sellers as well.

"They can go and sell their house and go find something bigger and better and still pay right about the same because you're at a better interest rate."

Cagle also urged renters to consider buying now. But she also strongly suggested they take one important step before picking up the phone to call her.

"Contact a mortgage lender before you do anything."

Cagle explained that this way a potential buyer knows what to look for in available properties now on the market.

"If they don't know what their price range is and what their options are, there's no way we can do our job as agents."

But Cagle said the number of potential clients who actually get 'pre-qualified' before calling her is still not very high, yet.

Lenders said this dip in mortgage rates demonstrates they can fluctuate quite a bit.

Consider this: Back in mid-November the 30-year fixed rate mortgage stood at 5.1 percent.

That was a 7-and-a-half year high, according to bankrate.com.

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