Mortgage rates drop below 3%, but experts say the fall won’t last long

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Mortgage rates are dropping below 3%, but experts say this will not be the last drop.

Mortgage rates drop below 3%, but experts say the fall won’t last long

According to a new report, the interest rate on the most popular mortgage in the country has been declining for the second week in a row and is now the lowest since the first half of February.

Cheap mortgage rates are fueling a housing boom, and analysts say homebuyers should pounce on today’s historically low rates as soon as they can.

“Typically, mortgage rates cannot be locked down until the buyer contracts for the desired home, and hopefully homeowners can use today’s drop to lock in low rates if given the opportunity,” says Daniel Hale, Chief Real Estate Economist. com.

And homeowners shouldn’t miss the chance to save money through refinancing.

30 year mortgage

House model on coins and money in the bank for saving mortgage fund investment, financing and home loan interest rate concept on bokeh background.

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The interest rate on a 30-year fixed-rate mortgage – the most common mortgage in the United States – fell to an average of 2.94% last week from 2.96% a week earlier, mortgage giant Freddie Mac reported on Thursday

Although rates have risen from historic lows in January, they are still among the lowest in history. A year ago, 30-year fixed income was 3.28% higher on average.

Mortgage rates are in a hot zone, according to Corey Burr, senior vice president of TTR Sotheby’s International Realty in Washington, DC. But as more Americans return to work and inflation picks up, rates will reverse their downward trend.

“I think we’re going to end the year with 30-year mortgages ranging from 3.3% to 3.6%,” Burr says. “And if you think about it, it means that the economy is doing better and we got out. pandemic panic forests “.

Mortgage for 15 years

The average rate on a 15-year fixed-rate mortgage has dropped to 2.26%, a lengthy Freddie Mac poll shows. That’s down from 2.30% in the previous week and 2.72% a year ago.

These short term loans are a popular refinancing option for homeowners who can afford higher monthly payments or want to cut their lifetime interest expenses.

If you already own a home and are paying your mortgage, you can qualify for a much lower rate with refi.

With 30-year mortgage rates below 3%, mortgage technology and data provider Black Knight says about 13 million Americans can save on average $ 283 per month by refinancing. This estimate applies to homeowners who have received a 30-year loan and have accumulated at least 20% of the equity in their homes.

5/1 Adjustable Rate Mortgage

The average rate on 5/1 adjustable rate mortgages fell to 2.59% last week, down from 2.70% the week before and 3.18% last year.

ARMs usually start at lower rates than their fixed-rate counterparts, but over time, rates can “adjust” up or down. They move in sync with basic rate or another test.

The loans are called 5/1 ARM because they are fixed for the first five years and then adjusted every (one) year thereafter.

Beware of rising rates

Businessman holding paper graph over expanding miniature house

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According to experts, potential borrowers who are saving money for a home should move faster.

“Low mortgage rate conditions have been a boon for the housing market, but may not last long as consumer inflation has accelerated at the fastest pace in more than 12 years and could lead to higher mortgage rates in the summer,” says Sam Hather, Freddie Mac’s Chief Economist …

Kevin Krieger, Business School Professor at the University of West Florida higher rates are also expected in Pensacola in the future.

“If I was in a good financial position to buy an affordable home, I wouldn’t wait for tariff-based reasons,” Krieger tells MoneyWise.

The government said last week that inflation was rising as the economy strengthened in April. The Consumer Price Index, which measures a basket of consumer goods and services, jumped 4.2% from a year earlier.

How To Get A Low Rate Mortgage

Happy couple moves to a new home.

bbernard / Shutterstock

The last time inflation jumped so strongly, 30-year mortgages averaged 16.9%, according to real estate agency Hale.

“While I do not expect mortgage interest rates to be in double digits anytime soon, I do expect mortgage rates to follow the rise in Treasury yields, as the combination of abundant supply and inflation concerns means that investors expect higher returns, ”she says.

The yield (interest rate) on 10-year government Treasuries recently approached 1.75%, up sharply from 0.92% at the start of the year.

To get the most attractive mortgage rate possible – although the rates are still low – your loan must be in good condition. Lenders will treat prospective borrowers with a score of 720 or more favorably.

If you haven’t seen yours for a long time, it’s easy Get a free view of your credit score online

When you buy a home, buy from a lender as well. Research has shown that receiving mortgage offers from five lenders can lead to savings of thousands of dollars over the life of the loan.

Keep your shopping comparison skills in your back pocket when it comes time to buy or renew homeowner insurance. Get quotes from multiple insurers so you have a great insurance rate coupled with a low mortgage rate.

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