For the first time in a month, the average rate of a 30-year fixed-rate mortgage dropped below 3%. And, rates on other loan types are even lower, giving homeowners reasons to celebrate and to lock in the best rate on a refinance.
These ultra-low refi rates will not last long, with the inflation rising and the US economy strengthening.
The mortgage giant Freddie Mac reported that the rates of the 30-year fixed-rate home loan dropped for a second straight week with an average of 2.98%, down from last week’s 3.09%.
In the week of Oct. 7, the rates were this low. They said that as the average is 2.98% many borrowers who shop around can get much lower rates than 2.98% for a 30-year mortgage.
A year back, the 30-year fixed-rate mortgage was averaging around 2.84%.
The Mortgage Bankers Association said that during the week ending Nov. 5, the overall applications for mortgages rose 5.5% leading to a 7% rise in demand for refinances.
Freddie Mac’s report shows that the average rates on 15-year fixed-rate mortgages averaged 2.27% last week, way down 2.35% a week earlier.
The current average is close to an all-time low of 2.10%, and if a borrower does comparison shopping they can avail of the 15-year refinance at 2% or even lower.
A year back, the 15-year mortgage rate was 2.34%.
The 15-year term loans come with much higher monthly payments than 30-year mortgages. But borrowers can save thousands of dollars by paying off their loans faster.
Last week the five-year adjustable-rate mortgage (ARM) averaged 2.53%. Which in the previous week was 2.54%.
Same time last year, the 5/1 ARMs were averaging at 3.11%.
The borrowers pay a fixed rate for an initial term of ARM, thereafter the rates can change at regular intervals. A 5/1 ARM rate is fixed for the first five years and thereafter it adjusts every year.
Borrowers who do not plan to stay in their homes for a long period of time will be able to save more with an ARM.
The rate could rise superior depending on key economic information that will be released next week.
Tim Lucas, an editor at The Mortgage Reports warns that the rate shoppers shouldn’t get complacent.
Danielle Hale, chief economist with Realtor.com says that in spite of the rates moving down, mortgage rates will start climbing when in November and December the Fed will reduce their purchase of mortgage-backed securities by $5 billion monthly.
Reference Source: Yahoo News
https://www.compareclosing.com/mortgagenews/mortgage-rates-of-refinances-drop-below-3/
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