Mortgage rates are dropping
In the realm of loan fees, so much can change in a generally short measure of time.
A valid example: the mortgage rate expectations for 2020, given by specialists, didn’t happen. Leading housing authorities to now make new expectations for the post-corona virus market.
A significant number of them are stating that home loan rates for late 2020 will remain underneath 3.29%.
If true, both home buyers and refinancers will look forward to record affordable rates for the rest of 2020.
Leading housing authorities concurred that rates will settle in the lower end during the second half of 2020. Should these experts be correct, we could see the lowest rate for a 30-year fixed-rate mortgage since 2012 (3.31%).
The graph demonstrates how home loan rate expectations for 2020 have fallen due to the effect of COVID-19.
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Why home loan rates dove in 2020
Can low rates recoup the housing market post-Corona virus?
Katsiaryna Bardos, a partner educator of accounting at Dolan School of Business, comments on what brought the record-low home loan rates.
“The Federal Reserve has responded to COVID-19 shock much faster than they responded to conditions during the Great Recession of 2008,” Bardos calls attention to.
“In addition to cutting the Federal Funds rate to near zero, the Fed dramatically expanded its asset purchase program. This included the purchase of billions of dollars of mortgage-backed securities,” she clarifies.
“These actions have increased the supply of money and liquidity in the economy. And that has led to historically affordable mortgage rates.”
“There’s a significantly lower demand for loans, declining inflation, and 10-year Treasury Notes approaching zero. These factors will cause rates to decrease.” – Bruce Ailion, Realtor and Attorney
Rates could continue dropping in 2020 if the economy remains moderate. The thought behind lower rates is to help get the economy going once more.
Once things begin to calm down, a significant amount of communities will restart their local economy. Mortgage holders may search for new homes, while lower rates will help individuals save on their payment.
Experts believe there will be an incredible buying showcase from the last quarter of 2020. Anticipate low rates due to the current economic situation. This will open the door for many individuals to look for their fantasy home.
Others aren’t so idealistic.
The fear being that in the wake of record joblessness and the small supply of houses won’t be able to support the real estate market.
Most of our clients are asking themselves, “Should I pin down a rate now or wait?”
Each situation is unique, of course, since a lot of it has to do with your comfort level for risk.
Once you decide to lock in, there is the possibility that rates will drop lower. But you could unexpectedly miss an attractive offer.
You could spin yourself in circles trying to make a decision! Most experts recommend not trying to time the market at the best rate. Instead, take a look at your financial position and capitalize on these historic low rates while you can.
Let us run the numbers so that you can understand the costs to refinance today, contact one of our lenders here.