Mortgage rates fell below 3% – here’s how much Americans can save on refinancing

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Base mortgage rates fell below 3% again, giving Americans another opportunity to refinance and fix historically low levels of funding.

30-year fixed rate mortgages averaged 2.95% for the week ended May 27, down five basis points from the previous week, Freddie Mac
FMCC, St.
-7.80%

reported this week… A year ago, a 30-year loan averaged 3.15%.

Fixed rate mortgages for 15 years fell two basis points to an average of 2.27%. The five-year adjustable rate mortgage, indexed by the Treasury, averaged 2.59%, as in the previous week.


While inflation remains an issue, mortgage rates may be volatile as lenders and bond buyers try to guess what the Fed will do next.

So how much is at stake? There are many homeowners left across the country who could save tons of money by refinancing their mortgages.

There is currently a $ 2 trillion matching mortgage, that is, mortgages secured by Fannie Mae.
FNMA,
-9.87%

and Freddie Mac – who could cut their interest rates by almost half a percent if they are refinanced, Freddie Mac chief economist Sam Hather said in a report.

By comparison, “Homeowners who refinanced their 30-year fixed rate mortgages in 2020 saved more than $ 2,800 a year,” Hather said.

It is unclear how long mortgage rates will remain so low. The decline this week was likely a reflection of market reaction to statements from officials from the Federal Reserve and the European Central Bank, Zillow said.
Z,
+ 3.32%

ZG,
+ 3.15%

economist Matthew Speakman.


“Homeowners who refinanced their 30-year fixed rate mortgages in 2020 have saved over $ 2,800 a year.”


– Freddie Mac Chief Economist Sam Hather

“Central banks remain relatively unconcerned about the recent sharp rise in inflation and are confident in their ability to contain the impact of price increases without stifling the brakes on economic recovery,” Speakman said.

Before these recent comments, he said that “bond yields and mortgage rates have surged over the past couple of weeks as investors have become more confident that higher-than-expected inflation will indeed force the Fed to tighten policy sooner than they did. earlier. stated.

While inflation remains an issue, mortgage rates may be volatile as lenders and bond buyers try to guess what the Fed’s next move will be.

Meanwhile, it’s not just homeowners who benefit from the low rates.

“Buyers who purchased a home last year and posted record low rates will benefit from predictable monthly payments as a hedge against inflation concerns,” said George Ratiu, senior economist at Realtor.com.

Low rates should continue to support strong demand among home buyers. The good news for them is that more and more sellers are entering the market. This will give buyers more choice and should slightly reduce competition for homes, which could ultimately help slow the record price increases that the market has seen in recent months.

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