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Will Lower Mortgage Rates Make Buying a Home More Affordable?

As mortgage rates come down, buying a home is poised to become more affordable in some ways—and more expensive in others.

Lower mortgage rates mean buyers will pay less in interest on their home loans. However, it could lead to more competition in the market as buyers who were waiting for rates to come down start looking at purchasing real estate again. This can lead to higher home prices.

“Traditionally, when interest rates come down, buying frenzies come, bidding wars come back,” said Ralph DiBugnara, a regional vice president at New American Funding. He is based in Edgewater, N.J. “And with that, home prices go up.”

Ralph DiBugnara NMLS # 19269