U.S. mortgage rates drop below 5% – The Lowest In Four Months

Quảng cáo

Home mortgage loan rates fell sharply this week as financial markets reacted to fears of an economic slowdown.

The average rate on a 30-year fixed-rate mortgage was 4.99% in the week ended Aug. 4, up from 5.30% the week before, according to Freddie Mac. It was the first time since April 7 that rates on the most popular mortgage product fell below 5%. Last year, the rate for this was 2.77%.

The average 15-year fixed-rate mortgage rate was 4.26%, up from 4.58% last week. It averaged 2.10% a year ago.

Quảng cáo

The average 5/1 Adjustable Rate Mortgage (ARM) was 4.25%, up from 4.29% last week and 2.40% a year ago. ARMs have become more popular this year because their interest rates are still lower than fixed-rate mortgages. They accounted for 8.4% of all mortgage applications over the past week, according to the Mortgage Bankers Association (MBA).

These rates do not include fees and other costs associated with obtaining a home loan.

How Mortgage Rates Will Change

Mortgage rates fell a week after the Federal Reserve raised interest rates by 75 basis points for the second time this year. That’s because comments from Federal Reserve Chairman Jerome Powell were interpreted as more dovish than expected, suggesting the central bank could ease the pace of future rate hikes, Zillow Capital Markets vice president Paul Thomas said in a statement on Wednesday.

Quảng cáo

“High levels of uncertainty around inflation and other factors could keep rates floating, especially as the Fed tries to navigate the current economic environment,” Freddie Mac chief economist Sam Khater said in a statement. stated in the explanation.

MBA data shows that consumers are keeping an eye on the ups and downs of home prices, taking every opportunity to take out a mortgage when interest rates are low. Mortgage purchase applications rose last week, but fall sharply for much of 2022 as interest rates rise.

Quảng cáo

Is now a good time to buy a home?

With interest rates and prices high and inventory relatively low, Jennifer Wauhob, a real estate agent in Katy, Texas, “still definitely sees a seller’s market.” However, Wauhob said the buying spree has diminished, And the number of homes to buy has increased a bit, which is good for homebuyers.

“We’ve been a hyper-velocity market for the past two years and we’re starting to get back to normal,” she said. “If you’ve been out of the market, now might be a good time to get back into the market.”

Still, Wauhob believes higher prices will continue to put pressure on many potential buyers.

“We’re going to see a lot of innovation around financing,” Wauhob said, adding that she’d heard of 40-year mortgages before.

Some lenders offer 40- or even 50-year mortgages, although these products are not popular. That’s partly because homes take longer to pay off and borrowers pay more interest over the life of the loan.

Tìm hiểu thêm:

Quảng cáo