As of March 9th, the average 30-year fixed rate is 3.13%. This is down from 3.18% at the start of the month and 4.12 in February. Similarly, the average 15-year fixed rate has dropped to 2.43%, also down from its February high of 3.83%.
These low rates have created an attractive market for potential mortgage and refinancing applicants. Homeowners looking to refinance can now do so at much lower rates than a few weeks ago. This could save them hundreds of dollars each month on their loan payments. It also allows them to potentially reduce their overall loan cost or shorten their loan term.
Homebuyers have also benefitted from the current market. Low interest rates make mortgages more affordable, allowing potential buyers to purchase more expensive homes with lower payments. Experts suggest that buyers who were previously not in the market may now be in a prime position to take advantage of the current market.
This decrease in mortgage rates was caused by a combination of factors. One of the main drivers of this decrease was the gradual rise in inflation since the start of 2021. The Federal Reserve lowered its federal funds rate in response to the increased inflation. This led to an increase in bond yields, which resulted in a decrease in mortgage interest rates.
An increase in bond demand from investors also had an effect on these rates. Investors have moved away from riskier investments due to the uncertainty in the economy created by the pandemic. This shift out of the stock market and into bonds caused an increase in bond prices, and a corresponding decrease in yields.
The current low mortgage and refinance rates are offering great opportunities for potential homeowners. Not only are they saving money on their monthly payments, but they are also able to take advantage of lower overall loan costs or shorter loan terms. For borrowers who choose to refinance, these lower rates can help them stay in their home and keep up with their payments.
For homebuyers, the current market is providing them with more purchasing power than they would have had a few months ago. The decreased rates are allowing potential buyers to purchase homes that they otherwise would not have been able to afford.
Overall, the current mortgage and refinance rates are providing plenty of advantages for potential homeowners. Low interest rates are driving down monthly payments and overall loan costs, allowing borrowers to either purchase more expensive homes or stay in their current home if they need to refinance. As these rates remain low, more potential homeowners will be able to take advantage of the current market.
This article was contributed on Sep 27, 2023
