In the last few months, we have seen drastic drops in mortgage rates, but recently, we’ve reached an all-time low. The 30-year-fixed mortgage rate was 3.99% one year ago, but it dropped to 3.24% in May. This stark decrease was followed by the lowest mortgage rate ever used: 3.15% with an average 0.8 point.
The federally chartered mortgage investor Freddie Mac creates the national average mortgage rate by collecting the rates from over 100 lenders across the country. The 15-year-fixed-rate average decreased to 2.62% from being 3.46% one year ago. The 5 year adjustable mortgage rate went from 3.6% to 3.17% in the span of one year. The chief economist at Realtor.com, Danielle Hale, states that low rates arise form investors preferring the security of bonds and Federal Reserve buying. With the increased affordability, home buyers are enthusiastic to find their dreams homes.
New data illustrates how the housing market is making a comeback, largely in part to these lower mortgage rates. According to the U.S. Census Bureau, sales of new-homes went up by 1% in April. Even though the pandemic has not ceased, the rise in home sales indicates that the housing market will be a source of stability during this tumultuous time. Although mortgage rates have fallen to record lows, home prices have not followed. However, low mortgage rates and inventory levels have allowed the housing market to remain active and competitive. For the time being, as reported by Bankrate.com, mortgage rates do not seem to be increasing or decreasing any further. According to data from the Mortgage Bankers Association, the measure of complete loan application volume has gone up by 2.7% in the last couple months.
Many home buyers are taking advantage of this record-low mortgage rate to find affordable, cozy homes, and if you choose to pursue your dream home, the VB Realty Group is here to help.
To read Kathy Orton’s full article, click the link below.
https://www.washingtonpost.com/business/2020/05/28/mortgage-rates-hit-new-all-time-lows/
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