After five weeks of declines, mortgage rates are at their lowest levels in 16 months which might lead to increased savings for potential buyers. Buyers who buy at historical low rates can potentially save thousands of dollars on their home loan. Also, while new purchases may be very enticing and lead to huge savings, people who purchased their home during a period of higher rates have a fantastic opportunity to refinance their home to also achieve massive savings.
According to the latest data by Freddie Mac, the 30-year fixed-rate average tumbled to 3.82 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount and are in addition to the interest rate.) It was 4.06 percent a week ago and 4.56 percent a year ago. The 30-year fixed rate moved below 4 percent for the first time since January 2018.
Several factors are exerting downward pressure on mortgage rates. Investors are anxious about the continuing irresolution of the U.S.-China trade dispute. They are worried about Brexit and European economic growth in general, which they fear could tamp down domestic growth. They are also concerned a recession may be near.
Buyers can still take advantage of low rates
Mortgage rates depend on many factors, but economists are expecting little change this year, giving buyers time to lock in a sub-4 percent rate. This is good news for folks who were on the fence last year, as the low-rate train is lingering at the station.
Even though the rates are at historic lows, make sure that you have your financials in order and get pre-qualified to make the home buying process as smooth as possible. For many homebuyers, 2019 might prove to be a better year for buying.
Source: Alpha Mortgage
