Since late March, a significant drop in mortgage rates has prompted many potential home buyers to accelerate the home buying process by starting a new loan application. Homeowners have also been initiating mortgage refinance applications in numbers that are causing a buzz in national headlines.
As of March 28, according to Freddie Mac, the average rate for a 30-year fixed rate mortgage was 4.06% compared to last year’s average of 4.4% for a 30-year fixed rate loan. The average for a 15-year fixed rate loan was 3.57%. As of April 4, the 30-year rate was 4.08%.
For home buyers, lower interest rates can translate to either lower monthly payments or to increased buying power, potentially allowing you to expand your search to consider homes that may not have been affordable for you when rates were higher. (Our sister brokerage on Oahu has a great graphic that shows how a decrease in interest rates impacts buying power. Take a look at that here.)
For homeowners, this may be a perfect opportunity to refinance, depending on your circumstances. Lowering your monthly payment or tapping into existing equity at a low rate can be a smart fiscal move, as long as the costs of doing so don’t outweigh the benefits.
If you need a referral to a reputable local lender who can help you navigate the loan qualification process or decide if this is a good time for you to consider a refinance, please get in touch. We’re keeping a close eye on the movement of interest rates and are happy to share resources to help you decide if this is the time for your home purchase, sale or refinance.
Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; April 8, 2019. Use the slider in the image above to change the date range.