Mortgage rates fell to their lowest level in four months, adding even more fuel to the booming US housing market.
A popular poll puts average rates below 3% for the fourth straight week, prompting Americans to refinance their mortgages or buy homes before borrowing costs rise.
It is widely expected that today’s ultra-low mortgage rates will eventually grow as the economy continues to improve. Thus, borrowers may not have enough time to arrange cheap loans.
30 year mortgage
Rates on 30-year fixed-rate mortgages fell last week to their lowest level since mid-February: 2.93% on average, up from 2.96% a week earlier, mortgage giant Freddie Mac reported on Thursday…
A year ago, America’s most popular mortgage averaged 3.13%.
Already historically low mortgage rates have been running down since early April, but that trend is likely to reverse in the coming weeks, says Daniel Hale, chief economist at Realtor.com.
Last week, the Federal Reserve released forecasts showing what its politicians now expect raise interest rates twice in 2023… At a meeting in March, officials indicated that the Fed is likely to keep its base rate close to zero until at least 2024.
“10-year Treasury rates have already increased since the Fed meeting, and we expect mortgage rates to continue,” says Hale. Mortgage rates tend to move in sync with the interest rate or yield on a 10-year Treasury note.
Mortgage for 15 years
“More hawkish signals from the Fed could finally lead to some meaningful upward moves in mortgage rates,” warns Zillow economist Matthew Speakman.
According to Freddie Mac’s, the average 15-year fixed rate mortgage rate did increase last week – but only slightly, to 2.24% from 2.23% the previous week. long-term examination…
A year earlier, 15-year rates averaged 2.58%.
Short term home loans are popular with refinancing companies, especially homeowners who can afford higher monthly payments and want to cut their lifetime interest expenses.
5/1 Adjustable Rate Mortgage
The typical 5/1 adjustable rate mortgage rate fell to 2.52% last week from 2.55% the week before and 3.09% a year ago.
ARMs usually start at lower rates than their fixed-rate counterparts, but over time, rates can “adjust” up or down, according to basic rate or some other test.
The loans are called ARM “5/1” because they are fixed for the first five years and then adjusted every (one) year thereafter.
14M can still profit from refinancing
Homeowners are aware of the fact that holding on to cheap mortgage rates while they last can lead to hundreds of dollars in monthly savings on refinancing…
Mortgage refinancing applications rose 5.5% on the week, according to a recent study by the Mortgage Bankers’ Association.
However, according to the latest figures from Black Knight, a provider of mortgage technology and data, about 14.1 million mortgage holders can still benefit from refi.
Those with a 30-year mortgage who have at least 20% of home equity and current payments are “high-quality refinancing candidates” and can save an average of $ 287 per month, Black Knight says.
These homeowners must also have a credit rating of at least 720 and be able to lower their mortgage rates by at least three-quarters (0.75) through refinancing. If you don’t know where your loan is, today is easy take a look at your credit score for free
Shopping comparison will help you find the best mortgage rate… Numerous studies have shown that borrowers who seek quotes from five lenders can save thousands over time compared to a borrower who only considers one loan offer.
Shopping also works well when you buy or renew your homeowner’s insurance. Collecting and comparison of prices from several insurers, you can find a company that will offer you the coverage you need, but for hundreds of dollars a year less than you are paying now.