This decline in interest rates is beneficial to both potential home buyers and homeowners looking to refinance, as it helps to make mortgages more affordable.
Economic uncertainties, such as the trade war between the US and China, Brexit, and geopolitical tensions in the Middle East, are causing investors to move their money away from riskier assets and into safer investments such as bonds. As the demand for bonds rises, so do prices, which leads to a decrease in yields – and therefore mortgage rates.
Looking specifically at US mortgage rates, the 30-year fixed rate has dropped to 3.59% while the 15-year fixed rate stands at 3.05% as of Sept. 22, 2019. The drop in mortgage rates indicates that now is a good time for potential home buyers to buy, as the lower interest rates can save them thousands of dollars over the lifetime of the loan. Additionally, homeowners looking to refinance can potentially save even more by taking advantage of the lower rates available and refinancing into a lower rate loan.
Additionally, mortgage rates are likely to remain low in the near-term, as the Federal Reserve recently cut its benchmark rate by 25 basis points, putting the current rate range between 1.75% and 2%. This follows a series of rate cuts by the Fed throughout this year, which have been largely responsible for driving down mortgage rates.
The most recent declines in mortgage rates have been favorable for potential home buyers and homeowners looking to refinance, and it appears that rates may remain low, at least in the short-term. This could be beneficial to those looking to buy a home or refinance one, as any savings on interest rates can go a long way towards saving money in the long run. However, it is important to remember that economic uncertainties can cause mortgage rates to rise quickly, so those looking to buy or refinance should not delay in seeking out a mortgage or loan.
This article was contributed on Jul 12, 2023
