Real-Estate

Mortgage rates drop below 3% again – HousingWire

Mortgage rates fluctuated again last week, down 5 basis points to 2.95% after managing to pop back up to 3% the week prior, according to Thursday data from Freddie Mac‘s PMMS. Mortgage rates have been hovering around 3% for over a month now, as macro economic factors left the bond market hesitant over the global recovery.

“Mortgage rates are down below three percent, continuing to offer many homeowners the potential to refinance and increase their monthly cash flow,” said Sam Khater, Freddie Mac’s chief economist. “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.”

Low rates not only save homeowners looking to refinance, they also help offset the steep increases in home prices. Steep competition — spurred by low mortgage rates, demographic factors and an improving national economy — is pushing home prices up at the strongest pace in a decade, with sales happening at lightning speed and often for well above list price.

Record low rates lit the fire under what was a scorching hot market in 2020 with some economists speculating rising rates may be the best option for cooling it back down. As rates rise, demand wanes and builders can catch up on the few months of inventory left for hungry borrowers.

“Mortgage rates over 3.75% should change the housing market landscape from its currently overheated state for both the new and existing home sales,” said Logan Mohtashami, HousingWire’s lead analyst.


How lenders can stay competitive as the refi boom slows

Whether lenders want to lower costs or improve performance, outsourcing can strengthen a company’s operations regardless of the housing market.

Presented by: Computershare Loan Services

According to Mohtashami, the new home sector can’t compete with the existing home sales market in terms of price, so when mortgage rates increase, it’s more of a disadvantage to the new home sales market. If new home sales don’t grow, housing construction will slow down.

“We’ll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes,” said Lawrence Yun, National Association of Realtors‘ chief economist. “The falling number of homeowners in mortgage forbearance will also bring about more inventory.”

Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button