Mortgage rates have taken a significant dip this week, falling to 6.59 percent, the lowest level seen since May 2023, according to Bankrate’s latest lender survey. This drop comes on the heels of a stock market sell-off and a decline in the all-important 10-year Treasury yield. For those who have mortgages with rates above 7 percent, the opportunity to refinance has presented itself. Additionally, if you have an adjustable-rate mortgage that you’ve been looking to get out of, now is the time to take advantage of the lower rates.
Greg McBride, CFA, chief financial analyst for Bankrate, emphasizes the importance of seizing the opportunity to refinance now, as mortgage rates are likely to continue falling in the coming months. However, he also cautions that there are no guarantees, and current rates should not be overlooked by prospective borrowers.
The current mortgage rates for different loan types are as follows:
– 30-year fixed: 6.59%
– 15-year fixed: 5.89%
– 30-year jumbo: 6.80%
These rates represent a significant decrease from just four weeks ago, providing borrowers with a chance to save on their monthly payments. The 30-year fixed mortgages in this week’s survey had an average total of 0.29 discount and origination points, which can help reduce the overall cost of the loan.
Experts in the industry are predicting that mortgage rates will continue to decrease throughout the year, especially if the Federal Reserve decides to implement rate cuts in September. Mike Fratantoni, chief economist at the Mortgage Bankers Association, believes that rates will drift lower as the year progresses. David Druey, regional president at Centennial Bank, also anticipates a potential rate cut by the Fed in the near future.
It’s important to note that mortgage rates are not directly set by the Federal Reserve but are influenced by investor appetite, particularly for 10-year Treasury bonds. This can lead to significant rate fluctuations, with rates rising on news of Fed hikes and plummeting in anticipation of rate cuts. As of now, forecasters are expecting the Fed to begin cutting rates in September, which could further drive down mortgage rates.
In conclusion, the current mortgage rate environment presents a favorable opportunity for borrowers to refinance and potentially save on their monthly payments. With rates at their lowest levels in over a year, now is the time to take advantage of the market conditions. Keep an eye on the Federal Reserve’s actions and market trends to make informed decisions about your mortgage.