Mortgage interest rates have remained steady this week, with the average 30-year fixed rate unchanged from last week but 12 basis points higher than a year ago. Potential home buyers may be wondering if now is a good time to buy a house.

Experts suggest that now could be a good time to buy due to stable interest rates, with no expected significant drops before the year ends. To make the most of this opportunity, buyers should have a strong financial foundation, a decent down payment, and focus on lower fees to offset the higher initial mortgage rate.

As of August 21, Freddie Mac reported that rates for 30-year fixed-rate mortgages are at 6.58%, up 12 basis points from last August. While rates have decreased slightly in the past year, they are still above 6.5%.

Although mortgage rates have decreased incrementally over the past year, it remains uncertain if they will continue to drop. Rates for both 30-year and 15-year fixed-rate mortgages are mostly below highs seen in the past year.

The Federal Reserve’s recent economic data suggests steady mortgage rates for the foreseeable future. The Fed has yet to cut the federal funds rate in 2025, after reducing it three times in 2024.

The Fed’s upcoming meeting in September may see a decrease in the fed funds rate, which could influence a potential drop in mortgage rates. However, the decision is still a month away, and many factors could impact the outcome.

While the 10-year Treasury yield has increased from a year ago, mortgage rates have not dropped to the desired 4% range. Lenders determine current mortgage rates by adding a spread to the 10-year Treasury yield.

Buyers may not see significant relief in a true recession as interest rates may drop, increasing demand for homes and driving prices higher. To save, buyers need both lower interest rates and home prices, which are currently stagnant or rising in many areas.

In the current housing market, buyers face a shortage of homes for sale, leading to high prices due to increased demand. Median home prices have trended upwards over the years, making affordability a challenge for many prospective buyers.

Prospective buyers should focus on affordability and consider purchasing what they can afford, whether it’s a smaller house or a condo, to start building equity. Exploring various financial tools and lesser-known neighborhoods can help find a balance between affordability and desirability.

Consider exploring longer commutes to find a home you love in master-planned communities outside major cities. Shared wall properties like condominiums can offer affordability in desirable areas, but be mindful of HOA fees when calculating monthly expenses.

While monthly payments on a 15-year mortgage may be higher, they offer lower interest rates and quicker home equity buildup. Rate buydown options can also make current mortgage rates more manageable by reducing interest rates through upfront payments.

Current mortgage rates are expected to remain above 6% throughout 2025 and 2026, according to the August Fannie Mae Housing Forecast. While 7% may seem high compared to recent rates, it is in line with historical mortgage rates.

While achieving a 3% interest rate is challenging, assumable mortgages from government-backed agencies could offer this opportunity. Assumable mortgages allow new owners to inherit the same low interest rate as the original loan, providing a rare chance for a favorable rate.

Read more at Yahoo Finance: When will mortgage rates go down? Rates stopped dropping and remain unchanged.