Despite another weekly hike in mortgage rates, analysts say the unstoppable hikes could soon come to an end – or at least pause if fears about how new COVID-19 strains will affect the resurgent US economy.
This should be welcome news to prospective borrowers who have sat on the fence waiting for rates to fall – or at least show signs of moderation – before buying a loan to buy a home or refinancing a home .
Interest rates on the popular 30-year fixed-rate mortgage have well surpassed the 3% mark, but some observers report seeing them lower interest rates for qualified borrowers.
Here you can find the latest average rates from a long-term survey, as well as the most up-to-date information on where mortgage rates could lead.
30 year mortgage
The average rate on a 30-year fixed rate mortgage rose to 3.17% last week from 3.09% the week before, mortgage giant Freddie Mac reported Thursday. Prices were higher for the sixth week in a row.
“Since January mortgage rates have risen half a percentage point from historic lows, and house prices have risen, leaving potential buyers with less purchasing power,” said Sam Khater, Freddie Mac’s chief economist, in a press release.
It is important to keep an eye on the latest jump in interest rates. According to Freddie Mac, mortgage rates are still well below 20, 10, and even a year ago when they averaged 3.50%. The company has been researching mortgage rates on a weekly basis for 50 years.
Although much of the country is a seller’s market, die-hard buyers can still do so lock at a great price. And homeowners still have the option to refinance and cut their monthly mortgage payments – potentially by hundreds of dollars.
15 year mortgage
The average interest rate on a 15-year fixed-rate mortgage rose from 2.40% to 2.45%, says Freddie Mac.
The short-term loans, which typically have lower interest rates than their 30-year-old siblings, are cheaper than a year ago when they averaged 2.92%.
Tim Lucas, editor at The Mortgage Reports, urges borrowers not to wait.
“As more Americans get vaccinated and the spring weather lures us outside, the economy is just starting to warm,” he said writes. “The faster it accelerates, the faster mortgage rates will rise.”
5/1 adjustable rate mortgages
According to Freddie Mac’s survey, which focuses on borrowers who have cut 20%, the 5/1 year variable rate mortgage rates averaged 2.84% last week, down from 2.79% the previous week but up from 3.34% last year and have excellent credit.
Variable rate mortgages – or ARMs – rise or fall over a period of time determined when the loan is taken out.
If you have any of these mortgages it is a good idea to research your ability to do so refinance your ARM into a more attractive fixed rate.
Is there a chance that mortgage rates could fall?
Mortgage News Daily, which tracks daily market fluctuations, reports that rates have fallen to their lowest level in nearly two weeks, but that it is too early to say whether the trend will continue. On Thursday, MND set the average for a 30-year fixed rate loan at 3.31%, down from 3.45% the week before.
“Much remains to be seen if this is the beginning of a broader rate reversal or just another in a long line of false starts,” MND’s Matthew Graham said in a post. “At some point one of these friendly jumps will have endurance.”
Danielle Hale, chief economist at Realtor.com, says the rate hike is likely to continue as more people get their shots and stimulus checks, which will help the economy strengthen and draw investors from bonds to stocks.
“Concerns about a possible new wave of COVID in Europe and what this could mean for cases in the US, however, could anticipate a pause in rate increases – if only brief – in the coming weeks,” says Hale in a note posted on Freddie responds Mac survey.
Why is it a good time to secure a new mortgage or refi?
Although recent data shows homeowners have pulled out of refinancing on their loans, 11.1 million mortgage holders can still cut their monthly payments by an average of $ 277, according to a new report from mortgage technology and data provider Black Knight.
Are you one of the millions? You’re in the sweet spot when you have a 30 year mortgage, have at least 20% equity in your home, and can boast about it a credit score of 720 or higher and could lower your mortgage rate by at least three quarters of 1 percentage point (0.75) by refinancing.
When deciding on a refi or buying a home, it is a good idea to compare prices from multiple lenders. Five lenders seem like the magic number Get the best deal on a mortgage.
And if you have any cash on a refinance, invest the savings. There’s an app that will Invest your leftover change from everyday purchases – even if you do most of your shopping with plastic.