Why You Should Buy a Home or Refinance Your Loan Right Now. Really, Get Going
Written By: Jaymi Naciri
Sunday, April 7, 2019
And you should do it right now.
Mortgage rates just had their biggest one-week decline in more than a decade, and letrsquo;s remember that rates were already near historic lows. Letrsquo;s also remember that it seems like just yesterday that they were up over 5 and the Fed was promising more rate increases throughout 2019.
Last week, the average interest rate on a 30-year, fixed-rate mortgage was 4.28; this week, theyrsquo;re down to 4.06. A year ago, rates were averaging 4.40. Rates for less-popular 15-year fixed-rate loans are also down, from 3.71 percent last week and 3.9 percent last year to 3.57 this week.
The drop was due to a mixed bag of economic factors, according to Sam Khater, Freddie Macrsquo;s chief economist. ldquo;The Federal Reserversquo;s concern about the prospects for slowing economic growth caused investor jitters to drive down mortgage rates by the largest amount in over 10 years,rdquo; he said. ldquo;Despite negative outlooks by some, the economy continues to churn out jobs, which is great for housing demand.rdquo;
Buyers who have been unsure about getting into the market may want to take a good look now, according to experts. Todayrsquo;s rates are the lowest they have been in 14 months, and that means extra buying power. ldquo;Rates have fallen substantially in the past four months,rdquo; said the Washington Post. ldquo;After hitting a seven-year high of 4.94 percent in November, the 30-year fixed-rate average has gone down nearly a percentage point.rdquo;
The Real Deal notes that, ldquo;High mortgage rates in the fall pushed mortgage applications to a four-year low,rdquo; but that deficit has been quickly erased. Current falling rates have also boosted mortgage applications; according to the Mortgage Bankers Association, ldquo;The market composite index mdash; a measure of total loan application volume mdash; increased 8.9 percent from a week earlier,rdquo; said the Post. Not surprisingly, ldquo;The refinance share of mortgage activity accounted for 40.4 percent of all applications.rdquo;
Effect on new homes
The decline in rates have also impacted new home sales, as buyers look to take advantage of savings. ldquo;The housing market, damaged by a spike in mortgage rates last year that cut into affordability, is signaling that itrsquo;s getting some strength back. Two publicly traded builders, Lennar Corp. and KB Home, credited lower rates for better-than-expected home order,rdquo; said Bloomberg.
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