Why the average U.S. mortgage rate is under 3% for the first time — and how you can benefit.
On Thursday, HousingWire reported that the average U.S. rate for a 30-year fixed mortgage fell to 2.98%, breaking the 3% threshold for the first time ever. The rate is down from 3.03% the previous week and according to Freddie Mac is the lowest recorded average rate in almost five decades of data.
Freddie Mac also reported that the average 15-year fixed rate fell to 2.48%, the lowest in a data series going back almost 30 years. What is causing these historic drops in mortgage interest rates?
Investors have poured money into U.S.-dollar-denominated bonds — mainly Treasuries and mortgage-backed securities — as money managers have reacted to an uptick in coronavirus cases across the country. The Federal Reserve has also continued to support the mortgage markets by purchasing about $4.5 billion a day of securities containing home loans packaged by Fannie Mae, Freddie Mac and Ginnie Mae.
This combination of factors has made it clear once again: If a low rate is your top mortgage priority, there has never been a better time to buy or refinance than right now. Buying a home or reducing the rate on your current loan at these record-low rates could help you save significant money over the life of your loan and put more money in your pocket to spend or invest elsewhere.
Just be aware that if you’re thinking about buying, inventory is low and competition is fierce in many markets. You should give serious thought to starting the pre-approval process now. That way, you can ready when record-low mortgage rates happen. You’ll also be in position to make a strong offer that stands out from others when you find your dream home.
If you’re considering a refinance, rates are still fluctuating daily and won’t necessarily remain at these record lows. Act now to make sure you get the biggest benefit from a new home loan.
Historically low rates may seem ideal for everyone, but no two home financing situations are the same. Contact your trusted CrossCountry Mortgage loan officer today to see if a rate lock is right for you. We’re here to help!