Good News for Potential Home Buyers as Mortgage Rates Hit Record-Low in the past Three Months
So it might not be the brightest days for your 401(k) at the current moment, but for the individuals aiming to refinance or even purchase a home, the recent stock market fluctuations could be the Christmas gift that you badly needed!
Reduction in Mortgage Rates All Over the Board
Indeed, anxiety by investors regarding the current market is resulting in depreciation in mortgage rates.
That’s because the latest data that was released last week Thursday by Freddie Marc shows that the average rate for a 30-year fixed-rate mortgage depreciated by 4.63 percent with a subsequent 0.5 point average.
For those who might not be so familiar with points, these are the fees that are paid to the lender that are an equivalent to 1 percent of the total loan amount. Interestingly, the percentage stood at 4.75 a fortnight ago and 3.93 percent last year.
When it came to the 15-year fixed-rate, the average dropped to 4.07 percent, recording an average of 0.5 points.
Additionally, the rate stood at 4.21 percent about a fortnight ago, and at 3.36 percent last year. Analyzing the five-year adjustable rate, the average slipped by 4.04 percent and had an average of 0.3 points.
Moreover, the rate stood at 4.07 percent a fortnight ago and 3.36 percent last year.
Unstable Mortgage rates
Indeed, mortgage rates have not risen for over a month thanks to the instability of financial markets greatly contributed by the U.S.-China trade, as well as the Brexit affair, and not to mention the overall slow projection in economic growth.
In return, investors have been a little more cautious and thus, have moved their money into more concrete assets such as bonds, resulting in the plummeting of yields.
For example, on Friday last week, the yield on 10-year Treasury plummeted by 2.85 percent, which translates to a drop of around 40 basis points in the span of one month!
For easier analysis, a basis point is one-hundredth of a percentage point.
That being said, because mortgage rates have a similar pattern to that of long-term bonds, they declined as well.
Analysts Confident of Bounce-Back
Nevertheless, some analysts are confident that this recent decline might be coming to an end.
For starters, a recent update has shown that the 10-year yield has gradually begun to climb yet again, recording a 2.91 percent jump on Wednesday.
According to Realtor.com chief economist, Danielle Hale, even though this week’s data might not yet be subject to scrutiny, one can tell that momentum has begun to shift and that the rates are poised to experience an upward increase.
Indeed, the likes of Hale are banking on certain economic indicators to base their arguments. For example, the likes of wage gains, job gains, inflation, are some of the highly scrutinized features to make these predictions.
Additionally, senior Zillow economist Aaron Terrazas believes that this week’s highly anticipated meet up of the Federal Reserve’s Open Market Committee will set in motion a myriad of expectations for the weeks ahead.
Moreover, Bankrate.com that likes to release mortgage rate trade index on a weekly basis, has discovered that nearly a half of all the experts that it interviewed have predicted an increase in rates for the coming weeks.
Nevertheless, there are a few analysts such as C2 Financial mortgage planner Jim Sahnger who is adamant that the rates will hold a steady rate.
According to Sahnger, in this market, volatility is the norm. This could be due to a number of global economic reasons, ranging from inflation all the way to Brexit.
In fact, according to data released this month, inflation was on a steady for both CPI and PPI, well within given expectations.
That being said, individuals are looking to set their eyes on the Fed meeting this week where Fed funds are poised to increase by 0.25 percent, and then move to Europe where Brexit talks will be underway, before turning to China to handle impending trade discussions. Sahnger believes that all these formalities should be sufficient to keep the rates in check, for the coming week that is.
On the other hand, plummeting rates are resulting in an increase in mortgage applications, as from the most recent data released by the Mortgage Bankers Association. Additionally, the market composite index experienced a 1.6 percentage increase last week.
More in Pocket Change
-
`
Why You Need to Think Twice Before Buying a House
So, you have been scrolling through real estate listings, envisioning your dream kitchen, and even bookmarking paint colors for the nursery....
November 26, 2023 -
`
Santo Spirits: Sammy Hagar and Guy Fieri’s Joint Venture
In the world of business partnerships, some combinations might seem unconventional at first glance. But when you delve deeper into the...
November 16, 2023 -
`
Everything You Need to Know About Mortgage Rate Lock
You have probably embarked on the exciting yet nerve-wracking voyage of purchasing a home. Amidst the sea of paperwork, open houses,...
November 9, 2023 -
`
7 Effective Ways to Make Your Business More Sustainable
In an age of rising environmental consciousness, making your business more sustainable isn’t just a trend; it’s a necessity. Sustainable practices...
November 3, 2023 -
`
Housing Market Going Up? Then Why Not Rent?
“Buy a house! It is the best investment!” How many times have you heard that? Probably enough to make a drinking...
October 29, 2023 -
`
Surprising! Celebs Who You Didn’t Know Had a Master’s Degree
When it comes to celebrities, we often associate them with glitz, glamour, and blockbuster movies. But did you know that some...
October 17, 2023 -
`
Navigating the Housing Maze: The 7% Mortgage Rate Quandary
If there is one thing that this year has thrown our way (apart from those fascinating tech gadgets we did not know...
October 12, 2023 -
`
Where to Buy a House in the U.S With a $100K Salary
Got a cool $100,000 annual paycheck in your pocket? Cheers to that accomplishment! With such a financial cushion, dreams of homeownership...
October 6, 2023 -
`
The “Grave” Housing Crisis Forcing U.S. Homeowners to Sell Their Houses
Every culture has its dreams and aspirations. For those living in the United States, it has traditionally been an idyllic house, spacious and...
October 1, 2023
You must be logged in to post a comment Login