Home prices continue to go higher while inventory remains low and new home construction cannot happen fast enough. Builders can’t keep up with demand. There are many potential home buyers who would like to take advantage of low mortgage rates, but competition among buyers is strong. Even offering more than the asking price is often not enough to “win” the house. For homeowners however, continued low mortgage rates make refinancing an option worth considering. If you haven’t refinanced yet, you should call me!
Mortgage interest rates are down below 3.0%, continuing to offer many homeowners the potential to refinance and increase their monthly cash flow. In fact, homeowners who refinanced their 30-year fixed-rate mortgage in 2020 saved more than $2,800 dollars annually. Substantial opportunity continues to exist today, as nearly $2 trillion in conforming mortgages have the ability to refinance and reduce their interest rate by at least half a percentage point.
Mortgage rates hit a record low of 2.65% for a 30 year loan back in January. Since then, a combination of Covid 19 vaccine roll outs and a recovering economy have boosted rates fairly steadily. Rates climbed over 3.0%, and refinance and purchase volume began to slow.
As of this week, we’re beginning to see that 30 year rate dip again. The average interest rate for a 30 year fixed-rate mortgage fell to 2.96%, marking its third week of sub-3.0% levels.
“The combination of low and stable rates, coupled with an improving economy, is good for home buyers,” said Sam Khater, Freddie Mac’s Chief Economist. “It’s also good for homeowners who may have missed prior opportunities to refinance and increase their monthly cash flow.”
Mortgage interest rates have remained under 3.0% for three consecutive weeks. Consumer income and spending are picking up, which is leading to an acceleration in economic growth. The combination of low and stable rates, coupled with an improving economy, is good for home buyers. It’s also good for homeowners who may have missed prior opportunities to refinance and increase their monthly cash flow. In summary, it is a good time in the mortgage industry!
After moving up for seven consecutive weeks, mortgage rates have dropped due to the recent, modest decline of U.S. Treasury yields. As the economy recovers, it should experience a strong rebound in the labor market. Combined, these positive signals will continue to bolster purchase demand. The drop in rates creates yet another opportunity for those who have not refinanced to take a look at the possibility.
Although mortgage rates remain low, we are beginning to see a pullback by those looking to enter the housing market. In fact, home buyer demand has gone from 25% above pre-COVID levels at the start of the year, when mortgage rates hit record lows, to 8% above pre-COVID levels today. We even see that purchase demand is diminished today as compared to late May and early June of 2020, when mortgage rates were the same level. This is confirmation that while purchase demand remains strong, the marginal buyer is feeling the affordability squeeze resulting from the increases in mortgage rates and home prices we’ve experienced in recent months
Interest rates on long term bonds are the result of inflation expectations as well as prospects of future GDP growth. All else equal, higher anticipated impending inflation raises interest rates, as does better projected economic growth. If long term bonds rise because markets anticipate strong growth, that is good as better growth, higher employment, and more investment, can more than compensate for higher interest rates. If, however, rates rise simply because of inflation, not good!
As expected, mortgage rates continued to inch up but are still hovering around 3.0%, keeping interested buyers in the market. However, residential construction has declined for two consecutive months and given the very low inventory environment, competition among potential home buyers is a challenging reality, especially for first-time home buyers.
As the economy improves given labor market optimism, continued vaccination roll-out and additional stimulus pending, mortgage interest rates increased this week. But even as rates rise modestly, the housing market remains healthy on the cusp of spring home buying season. Home buyer demand is strong and, for homeowners who have not refinanced but are looking to do so, they have not yet lost the opportunity
As the market reacts to a new administration in Washington and COVID-19 driven economic malaise, mortgage rates continued to decrease this week, just slightly. Even as house prices increase at the fastest rate we’ve seen in years, competition to buy is strong given the low inventory that exists across the country. The fact that there are not enough homes to meet demand is going to be an ongoing issue for the foreseeable future.