With recent talks of a potential recession looming and rising economic uncertainty, many buyers are noticing something that seems like a silver lining: mortgage rates are dropping.
In fact, the rates today, April 4th 2025, are the lowest we've seen them this entire year. Naturally this sounds like a win... lower rates usually means lower monthly payments, leading to more buying power for you if you're trying to purchase a home in South Jersey right now.
But there is a catch. Mortgage rates don’t exist in a vacuum. When they drop, buyer activity tends to spike. And that surge in demand can lead to higher home prices which might make homeownership even more unaffordable for you. So let’s break this down.
Why Are Mortgage Rates Dropping Right Now?
Economic uncertainty tends to push rates down. When markets are shaky, the Federal Reserve and lenders often respond by making borrowing cheaper to stimulate activity. We’re seeing that play out now, with recent policy changes and broader economic concerns (like potential job losses and slowed business growth due to tariffs) contributing to this rate dip.
So yes—today’s lower rates are in response to an economy that isn’t exactly thriving. Tune into this 10 minute video with The JFKLiving Team's Resident Market Nerd Melisa Anderson, on what she's seeing in the market right now:
How Lower Rates Affect Buyer Behavior
When rates drop, buyers who were previously sitting on the sidelines may jump into the market. That increased demand can cause a few things to happen:
- Competition heats up. More offers on homes, more bidding wars. We saw this during 2020/2021/2022 in South Jersey, when rates dropped to historically low, and many buyers found themselves in bidding wars with 30+ other offers! And this leads to...
- Prices rising. Which leads to...
- Homes selling faster. Inventory gets scooped up quickly because buyers are typically pre-approved, and ready to jump on a home the second they like it. Many buyers even submit extremely competitive offers sight-unseen (i.e. before even touring the home) to get in before everyone else.
Should You Wait For Even Lower Rates?
If you're already in the market, ready to jump on a home you fall in love with, it may make sense for you to contact your mortgage lender ASAP to see if today's the day to lock in a mortgage rate. Today, 04/04/2025, the 30-year fixed average is down to 6.55% (and the highest it's been this year is 7.04%).
But naturally with national headlines discussing a looming recession, which may make rates drop further, you might be wondering if you should still wait. It depends on your financial situation and goals, and you should always discuss a strategy with a trusted hyperlocal real estate agent and a lender they've recommended and vetted, but here are a few things to consider:
- If you find a home you love and can afford it comfortably at today’s rate, everything else is (kinda) irrelevant. Affordability is the most important factor, and there's never going to be a 'perfect' moment in buy or sell a house.
- If you wait too long, hoping for rates to fall further, you may face more competition and higher home prices. So any saving you make from a lower mortgage rate can be cancelled-out by paying $50,000 more for a house because of increased demand in the market.
- If your plan is to 'wait' for a potential future lower rate, you miss out on today's equity. The data from Camden County, New Jersey in February 2025 shows a 15% increase from February 2024 in the median sold price of homes. If you waited a whole year to buy, you 'lose' that equity gain.
If you’re unsure, connect with your lender or real estate pro to model a few scenarios. Knowing how a quarter-point shift in rates affects your monthly payment can bring major clarity.
The Bottom Line
Low mortgage rates are tempting—and for good reason. They can absolutely create opportunities for buyers. But timing the market perfectly is hard (even for the pros). The best move? Stay informed, be prepared, and make decisions based on your goals, not just headlines. A smart, well-timed purchase in any market can still be a great investment.
If you’re thinking about buying and want to talk strategy, fill out our form below. We’re always here to help you navigate the market with confidence.
