Mortgage rates hit historic lows, and refinance applications are through the roof. Should you take advantage now, or wait? How much could you save?
March 13, 2020
The national average 30-year fixed-rate increased to 3.36% this week, having risen from last week’s record low of 3.29%. Last year during this time, rates were sitting at 4.31% - nearly a full percentage point over last week’s.
Mortgage applications shot up by 55% from last week, with refinance share being 66.2% of total applications. In this low-interest environment, current homeowners and new homebuyers have a special opportunity to save on monthly payments.
Why did rates drop?
When oil prices fell due to low demand and excess supply, our stock market fell as well. The American consumer’s low confidence in our economy pushed investors into the bond market, which lowered mortgage rates. New homebuyers and current homeowners came flocking to take advantage of the lowest rates we’ve seen in a very long time.
Are rates rising now? Why?
Yes - rates have seen an uptick this week. With so much demand for home loans, lenders are congested with business. So, rates have rebounded upwards in response.
...once lenders have slowed down due to the massively higher rates [than in the beginning of March], they'll lower margins as much as the price of mortgage bonds allows in order to drive new business.”
COO at Mortgage News Daily
When should you lock your rate?
The answer is simple: if you’re comfortable with the rate presented to you, go ahead and lock! Will rates drop again in a few months? Maybe - but why take an unpredictable risk? Remember: the only time you can identify the bottom is after it has passed.
The mortgage world is in uncharted territory. We’ve never had this kind of unpredictable up-and-down movement before, and no one knows exactly when rates will become more predictable. Rates can move by the hour, and the ones you’re seeing advertised on social media may assume perfect borrower credit scores or points involved.
Find out what you qualify for today
Let’s find out exactly how much you can save with today’s rates. Get started on a free pre-approval today!