Mortgage Rates Continue to Slide

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Filed under: Mortage Industry News

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When the Federal Reserve Board raised it’s prime lending rate a couple months ago, the public’s fear was that mortgage rates would then begin to rise and home affordability would suffer.

Turns out, the exact opposite has happened thus far.

For the sixth straight week, mortgage rates have fallen, with Freddie Mac reporting that we now have the lowest rates in the past 10 months.  30 year fixed rates in the mid to high 3% range have become the norm for now.

How long will this trend continue?

I wish we had that crystal ball, believe me!  However, the Federal Reserve Chair Janet Yellen recently being very vague with d Congress and saying market conditions have become “less supportive of growth,” it could be a while before we see Fed plans to raise the federal funds rate again.

More importantly, with the major volatility in the stock market in recent months, many investors are running to the security of bonds.  When this happens, we typically see rates move downward, as we have witnessed in the past 6 weeks.

So what action should be taken?

First an foremost, if you have clients who are on the fence about buying now, share this information.  Let them know that from an interest rate perspective, now is a great time to buy and finance a home.

Secondly, if you currently have clients in escrow who are within 45 days or less of closing, it wouldn’t be a bad time to ask them if they have locked in their interest rate for their loan.

Finally, it is a great time to refinance.  If you have past clients that purchased a home a year or two ago, it’s a great opportunity for you to touch base with them, give them this information, and let them know that they may want to consider refinancing.  If it can save them some money every month, you’ll end up looking like the hero.  Who knows, they may just have a friend or  neighbor to refer to you at the same time!

If you have any other questions or need assistance, don’t hesitate to give me a call.

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