Mortgage rates plummeted last week and continue to drop this week.
The 30-year fixed rate, usually the most popular choice for prospective homeowners, dropped to 4.45% from 4.57% last week, which represents its lowest point since last November, according to the Mortgage Bankers Association.
According to the website BankRate.com the overnight average of a 30 year fixed rate loan is 4.37%. This is significantly lower from last weeks average of 4.52% (Which is still incredible!!!)
The perennially less-popular 15-year fixed rate dropped to a new record low of 3.52%, down from 3.67% a week prior.
The drop in interest rates send total mortgage applications — both for purchases and refinancings up by about seven percent, compared with a week earlier, Michael Fratantoni, the Mortgage Bankers Association’s vice president of research and economics told CNN Money. Though that increase may seem substantial, he notes that applications are still far below last year’s level.
“Refinance application volume increased, but even though 30-year mortgage rates are back below 4.5 percent, the refinance index is still almost 30 percent below last year’s level. Factors such as negative equity and a weak job market continue to constrain borrowers,” he noted.
Greg McBride, Bankrate.com’s chief economist, told CNN Money that mortgage rates are following bond yields on their own downward spiral.
Low rates and home prices that have fallen over 30% from their peak mean that there’s never been a better time to buy a home.
“Time is of the essence,” McBride cautioned, offering a caveat. “The loan limits (for Fannie/Freddie mortgages) drop on October 1 so acting now for closing by September 30 is important for buyers in the upper price levels.”
If you are looking at purchasing a home, now is the best and most affordable time to purchase a home. If interested in purchasing a home in the DC Metropolitian area, call David Abramson for a free list of homes.
David Abramson, Licensed Realtor in Maryland and DC
4733 Bethesda Avenue
Bethesda, MD 20814