Mortgage Rates Hit All-Time Record Low Heading Into Holiday Weekend

[james.hendrickson]

From last Monday - a bit late, but better late than never:

File this under: mortgage rates about to get really, really low.

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Mortgage Rates Hit All-Time Record Low Heading Into Holiday Weekend

MCLEAN, Va., July 02, 2020 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey^® (PMMS^®), showing that the 30-year fixed-rate mortgage (FRM) averaged 3.07 percent, the lowest rate in the survey’s history dating back to 1971.

“Mortgage rates continue to slowly drift downward with a distinct possibility that the average 30-year fixed-rate mortgage could dip below 3 percent later this year,” said Sam Khater, Freddie Mac’s Chief Economist. “On the economic front, incoming data suggest the rebound in economic activity has paused in the last couple of weeks with modest declines in consumer spending and a pullback in purchase activity.”

News Facts

• 30-year fixed-rate mortgage averaged 3.07 percent with an average 0.8 point for the week ending July 2, 2020, down from 3.13 percent. A year ago at this time, the 30-year FRM averaged 3.75 percent.
• 15-year fixed-rate mortgage averaged 2.56 percent with an average 0.8 point, down slightly from last week when it averaged 2.59 percent. A year ago at this time, the 15-year FRM averaged 3.18 percent.
• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.00 percent with an average 0.3 point, down slightly from last week when it averaged 3.08 percent. A year ago at this time, the 5-year ARM averaged 3.45 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

MEDIA CONTACT:
Chad Wandler
703-903-2446
Chad_Wandler@FreddieMac.com

[bjl584]

The issue is supply.
Mortgage rates might be zero, but there aren't many existing houses (typical starter homes) for sale.

People in more rural areas can cash in right now.
There is a trend right now of folks wanting to move away from the cities.
Couple that with an anemic supply of houses, and a seller can name their price.

[AdmRuss]

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[GoodLiving]

When I was a kid, mortgages were double digits. When I had a mortgage, I have lost count how many times I refinanced for a reduced rate. I think my first mortgage was an arm at 4.75%

[disneysteve]

When I had a mortgage, I have lost count how many times I refinanced for a reduced rate. I think my first mortgage was an arm at 4.75%

Our first mortgage (1994) was right around 8.5%.

[bjl584]

I talked to my bank a few weeks ago
i can roll out of my 20 yr to a 15yr and keep my payment the same.
It would knock 3 years off the repayment schedule and save me around $50K over the life of the loan
Only thing stopping me are the closing costs, around 3K
Still pondering over doing it

[disneysteve]

It would knock 3 years off the repayment schedule and save me around $50K over the life of the loan
Only thing stopping me are the closing costs, around 3K

So you would spend 3K to save 50K. What's the downside?

[bjl584]

So you would spend 3K to save 50K. What's the downside?

No downside really.
Just trying to decide if i move now or wait a few years.
Refi today and keep the payment the same or refi in a few years and knock several hundred off my payment while keeping the term the same.
Do I want to save now or later I guess.

[disneysteve]

No downside really.
Just trying to decide if i move now or wait a few years.
Refi today and keep the payment the same or refi in a few years and knock several hundred off my payment while keeping the term the same.
Do I want to save now or later I guess.

I guess you need to run the numbers and see how much extra you'd pay in interest for those few years. And you're gambling on what interest rates will be then. Even a small increase between now and then could wipe out much of the savings.

I'd probably do it now and if rates stay super low, you could always refi again in the future.

[bjl584]

I guess you need to run the numbers and see how much extra you'd pay in interest for those few years. And you're gambling on what interest rates will be then. Even a small increase between now and then could wipe out much of the savings.

I'd probably do it now and if rates stay super low, you could always refi again in the future.

Yes. It is a gamble. But, I doubt rates will move much in the next year or so.
I will have to move fairly quickly on this. Just not today

[Rachelwjd]

Well, there's a simple motive for the rise of the mortgage rates - inflation. Mortgage lenders usually have to keep interest rates at a level that is at least enough to get the better of the erosion of purchasing power through inflation to ensure that their interest returns represent an actual net profit. That's why I started using a mortgage calculator to calculate my monthly payment. That helps me a lot at saving money. By reviewing different interest rates, amortization, and the deposit, I can find various options and solutions to my problem.