Mortgage Rates Drop in St. George: What’s Next for Homebuyers?

Homebuyers in St. George are getting a bit of relief as mortgage rates have dipped to their lowest levels in over two months. According to Freddie Mac, this drop, paired with a slight improvement in housing inventory, is a promising sign for those looking to purchase a home in Southern Utah.

But what’s next for mortgage rates as we head into March? Experts suggest that while minor fluctuations may occur, dramatic shifts are unlikely.

 

Rates Expected to Stay Steady

Todd Luong from RE/MAX DFW Associates notes that mortgage rates will likely remain stable in March. “The Federal Reserve doesn’t appear to be in a rush to lower interest rates, and their stance will continue to influence mortgage rates,” says Luong.

Additionally, the Federal Open Market Committee (FOMC) has revised its projection to just two rate cuts in 2025, down from the initially forecasted four. Economic policies from the Trump administration, including tariffs, could also impact inflation and, in turn, mortgage rates. “Higher inflation won’t help homebuyers still waiting for rates to drop,” Luong explains.

 

 

Will Mortgage Rates Stay Around 7%?

Greg McBride, chief financial analyst at Bankrate, predicts that mortgage rates will hover around 7%, with inflation expectations and government borrowing playing key roles. “For mortgage rates to drop meaningfully, we need clear and undeniable progress on inflation, and that’s not happening yet,” says McBride.

Meanwhile, Jessica Lautz, chief economist at the National Association of Realtors, believes rates will hold steady in the mid-6% range. “If inflation rebounds, it could delay further cuts to the Fed Funds rate, which would impact the mortgage market,” Lautz explains.

On the other hand, NerdWallet’s mortgage expert, Holden Lewis, anticipates a slight rise in rates this March. “Market reactions to economic uncertainty and persistently high inflation could push rates up marginally,” Lewis notes.

 

 

What Does This Mean for St. George Homebuyers?

Gone are the days of 3% mortgage rates, making affordability a challenge for many buyers. However, McBride highlights a silver lining: slower home sales mean houses are staying on the market longer, offering buyers more options and potential negotiation power. “It would take a significant movement in mortgage rates to truly shift the housing market,” he adds.

Chip Lupo, analyst at WalletHub, points out that stable mortgage rates, combined with high home prices and limited inventory, may continue to dampen buyer demand. “Our latest economic index reflects increasing buyer hesitation, with the likelihood of purchasing a home in the next six months dropping by over 21%,” says Lupo.

For those looking to buy in St. George, the key is to stay informed and act strategically. While mortgage rates may not drop significantly in the immediate future, a well-planned purchase could still lead to long-term success in the Southern Utah housing market.

 

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