Note: Not only do we generally recommend refinancing now (dependent on your financial picture and current rate), but we will be covering Fannie Mae and Freddie Mac’s Refi Now and Refi Possible programs in our next article.
Mortgage rates are extremely low. There’s just no other way to put it. 15-Year Fixed-Rate Mortgages Held at 2.27% This Week! That number is nearly the lowest it’s ever been in 50 years of Freddie Mac tracking. The same is true of the other mortgage types monitored by the agency.
With rates historically low, refinancing is in many homeowners’ best interests. Almost half of Black and Hispanic borrowers could save $1200 annually, per a new study (more on that in the Refi Now and Refi Possible article as well).
Immediate mortgage rate news — Freddie Mac
The immediate news on mortgage rates is a slight rise to the other two categories of loans tracked by Freddie Mac in its Primary Mortgage Market Survey (PMMS), as indicated below:
Last Week (ending Thurs., 5/27/2021):
· 15-Year Fixed-Rate Mortgage (FRM): 2.27%
· 30-Year FRM: 2.95%
· 5/1-Year Adjustable-Rate Mortgage (ARM): 2.59%
This Week (ending Thurs., 6/3/2021):
· 15-Year FRM: 2.27%
· 30-Year FRM: 2.99%
· 5/1-Year ARM: 2.64%
While those rises were minor upticks of 0.04% and 0.05%, the market does not look as if it will go much lower in 2021.
Personal finance educator: Rates will not drop further
Certified Educator in Personal Finance (CEPF) Laura Grace Tarpley answered the hypothetical question of whether mortgage rates will decrease further. Her answer: “Probably not.” Tarpley does not expect there to be any significant drop — although there could be slight declines from week to week.
Tarpley says that the mortgage rates will not go lower in the near term because mortgage rates drop when inflation and employment worsen. While there was a huge jump in inflation in April, it will likely be a blip, per the Federal Reserve. As for jobs, the US is slowly adding positions, but the growth rate has not been as stellar as forecasts had suggested.
These inflation and employment shifts are insignificant in isolation, so there has not been a strong impact on the mortgage rate. Expect rates to stay about the same as they are now for the next few months but not to decline further.
Get your best rate
Have you been reading about the incredible rates? Are you considering a refi or locking in a new-home mortgage? We believe getting the best advantage for your mortgage is easy when the loan is tailored to you. Apply with BAM now.