Last week, mortgage rates hit a record low for the 14th time this year. This year seems to have become the year of low rates, inspiring a continually growing amount of purchases and refinances. With rates so low and demand for homes so high, it’s not as easy to find the right home at the right price, meaning you must be quick and prepared when you find your dream home. And if refinancing is the route you want to take, now is the time to review your options.
As of December 3rd, Freddie Mac reported the lowest interest rates in 50 years. This time last year, rates were almost an entire percentage point higher than they are now. Mortgage rates are determined, in part, by the state of mortgage-backed securities and treasury yields in the market. Despite poor performing mortgage-backed securities and rising treasury yields – all circumstances that would typically cause mortgage rates to increase – mortgage rates remained stable and went on to hit record lows.
The Federal Reserve has continued to purchase mortgage-backed securities in order to assist the economy during the pandemic and help lenders make more loans. The added security the central bank creates in doing this combined with the effect COVID-19 has had on the economy allows mortgage lenders to offer loans at low rates.
With interest rates falling lower and lower, more people have been purchasing homes. In turn, the supply of homes has decreased. As demand has stayed high and supply has become scarce, home prices have been rising – in some ways negating the benefits of low interest rates. The challenge now is to find the right home at the right price. If this is accomplished, you can take advantage of historic low rates.
In order to be prepared when you find your dream home, you’ll want to get started on the mortgage process. We have helpful, experienced Loan Originators who are ready to guide you through the process and answer any questions you may have. They are here to help you make your homeownership dreams a reality. So, contact us today to get started.
Sources: Freddie Mac, CNN, Mortgage News Daily, MarketWatch