What You Need to Know About Mortgage Rates NOW

According to Freddie Mac, the 30-year fixed mortgage rate dropped to an average of 3.78%, while the 15-year fixed rate was cut to an average of 3.08% – both rates are based on 0.5 points. Although slightly higher than the 3.44% and 2.75% averages respectively one year ago, these rates still translate to affordable monthly payments.

 
With the full impact of Hurricanes Harvey, Irma and Jose not yet known, rates may potentially drop a bit more. In addition to the unknown costs of hurricane recovery, global political situations remain volatile. Nervous investors are more likely to put their money into bonds, therefore reducing bond yields. This often paves the way to lower interest rates.

 

However, mortgage applications slid due to multiple factors.

First, housing inventory remains exceedingly tight and home prices are soaring. Although total mortgage volume is still 23% lower than last year, we’ve finally observed a 3.3% week-over-week increase for the week ending September 1, according to the Mortgage Banking Association.
 
Quoting MBA economist, Joel Kan, CNBC reports that refinance volume also jumped. Kan explains, “For the first time since January, the majority of application volume was for refinances, with the refinance share almost 51%.”
 
Another factor in lower mortgage volume is the fact that Hurricane Harvey (and now Irma) delivered a one-two punch to loan applications in hard-hit states. Not only were banks and other lenders in the damaged areas closed and unable to conduct business, homes for both purchase and refi needed to be assessed and reappraised. As a result, “Texas unadjusted application volume was down 21.7% for purchase and 22.9% for refinances,” Kan said.

 
 
Each borrower’s situation is unique. Contact one of our mortgage professionals discuss your circumstances and goals before making a decision. This blog post is being provided for the purpose of general education, but should not be construed as specific advice.

 
- By Stephanie Clark , Sep 15, 2017



 
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