This week we saw interest rates reach a 48 year low as the 30-year rate checked in at 3.34%. That’s the second lowest 30-year fixed rate in history! Ever since Freddie Mac began keeping track of rates back in in 1972 we have been at sub-4% levels only a handful of times. This week is one of those moments. Interest rates are at historical lows and yet more buyers aren’t taking advantage.
So far in February we’ve seen a strong buyer turnout and more than usual showings on our listings. The inventory of homes has not caught up with demand. Even if you haven’t found the home of your dreams be prepared to strike with a lender’s pre-approval in hand. If you are considering buyer or refinancing soon then now is the time to lock in these low rates. I read this quote today from an industry insider. Matthew Graham of Mortgage News Daily stated, “At no time in modern economic memory have mortgage rates been able to move significantly or aggressively lower than they are right now.” I couldn’t agree more.
The cause of the drop in mortgage rates appears to be a reaction to the multi-day tumble on Wall Street this week. That event is the result of the concern for an international trade slowdown. And the slowdown in trade is due to the concerns over the growing Wuhan coronavirus pandemic. That was a mouthful. Hey, I’m not a professional writer.
The takeaway for anyone is to grab these great rates while they are still available. Because they will go back up – my best guess at least. But even if they do back up a quarter or half percent you would still be getting a great rate!
“At no time in modern economic memory have mortgage rates been able to move significantly or aggressively lower than they are right now.”Matthew Graham, COO, Mortgage News Daily
As for historical perspective – back in the early 1980’s interest rates hit 18%. Sellers had a difficult time selling their homes because of it. Many sellers resorted to taking back mortgages on their homes just so buyers could purchase. Wraparound mortgages were very popular, albeit not always per the original lender documents. But it was the only way to sell your home! I was a young Realtor at the time when rates finally started to come down and I remember the milestone points. When they hit 12%, because it was an easy 1% per month calculation. Then when rates fell into the 9’s we all thought that the real estate Gods has shined a golden light upon us to sell more houses. It worked too!
So when I see rates in the 3’s the only thoughts I have are why more buyers don’t step into the game. Prices, at least in our area, are in the $600,000’s for a starter home but with low rates it is doable with a little help. Let’s hope more buyers can take advantage of this terrific opportunity.