As we head into spring, mortgage rates continue to fall. They have officially reached their lowest point in over three years. Presently, the average cost of a 30-year fixed rate mortgage is 3.62 percent, which is down 0.03 percent from last week. This is good news, especially if you will be buying a home soon.
This rate decrease has been steadily falling and is estimated to drop further. One year ago, a 30-year loan averaged 3.8 percent. The current rates are cheaper than when the Fed raised short-term rates for the first time in nearly 10 years.
The market usually determines the cost of your home loan. For instance, rates tend to move when 10-year Treasuries see action. Thanks to the fact government investors are placing their money in government bonds, Treasuries have been dropping quickly. This will likely make mortgage rates fall more in the near future.
With the accessibility of inexpensive borrowing, home sales and prices have increased. In February 2016, sales increased 6.7 percent from February 2015. Also, prices were approximately 8 percent higher, and real estate was moving rapidly. It is sure to be a competitive market throughout the rest of 2016, but everything rests on supply.
The economy is facing a few challenges. Even though the housing market is expected to grow, it is sensitive to the uncertain “macroeconomy.” To sustain solid growth, inventory must improve.
It seems mortgage rates will drop to meet the falling yields, and it will be in time for the spring rush. If you will be house-hunting soon, it seems you will enjoy an affordably low mortgage rate.