30-Year Mortgage Rate Drops Below 3% Again
The last calculation of Freddie Mac’s average mortgage rate figures nationwide showed a drop in two of the three mortgage types the agency tracks. For the week ending Thursday, July 1, the 15-year fixed-rate mortgage (FRM) declined 0.08 week-over-week (YOY) and 0.30 year-over-year (YOY). Meanwhile, the 30-year fixed-rate mortgage reduced 0.04 YOY and 0.09 YOY; the 5/1-year adjustable-rate mortgage (ARM) went down 0.46 YOY but rose 0.01 WOW.
Freddie Mac reported that the housing market had decelerated due to a reduction in inventory and continuing elevated sale prices. The market was still benefiting from the stability of historically low mortgage rates, though. Plus, the economy is growing, with additional economic sectors rebounding.
Freddie Mac Chief Economist Sam Khater noted that despite the reduced pace of the housing market, prices were staying high due to ongoing low inventory.
How good are these rates?
As the COVID-19 pandemic slammed the economy during the last eight months of 2020, mortgage rates plummeted. Because the rates fell so low, refinancing became incredibly popular, creating a mortgage lending surge. In more than five decades of recordkeeping, the first time that rates fell below 3 percent was in July 2020, when it reached 2.98 percent.
How fast do you need to act?
While rates are staying low for now, it is important to lock your rate ASAP if you still want to benefit from them. The 10-year Treasury yield, which has been increasing, typically moves in the same direction as mortgage rates. When investors start to put more money into stocks and other riskier investments instead of bonds and other safe-haven assets, that confidence results in rising Treasury yields.
Mortgage Bankers Association Chief Economist Mike Fratantoni noted that fast-rising home prices (resulting from limited-supply housing), increasing inflation, lukewarm job market figures, and increasing consumer confidence were key signals for the Federal Reserve to make a move on the interest rate. Last week, with unsureness about how the Federal Reserve will act, mortgage rates were volatile.
As the economy continues to recover from the pandemic, it appears that the Federal Reserve will likely become more aggressive. While the mortgage interest rates are incredible whether you are refinancing or buying a home, they may start inching up based on Friday’s job market data. The jobs announcement revealed that 850,000 new jobs were added in June.
Get your best rate
Are you buying a new home or thinking about a refinance? Now is a perfect time to act. At Best Advantage Mortgage, we can tailor a loan to help you save money where it matters most. Get started.