Mortgage rates are close to all time lows – I never thought I would say that again!! The past few years we have talked about interest rates increasing and last year they did. Last spring rates were about one percent higher than they are now. Are they going to drop lower?
The Fed meets this month and there is talk about whether or not they will drop rates again. Last month many investors expected another .25% drop. Now not as many are expecting it, but we won’t know until they meet.
So with all the talk of a recession looming, what will happen with interest rates? The last time we had a recession, the rates were over 6% and with the stimulus from the Fed and the rate drops, we saw rates drop into the mid 3% range. Since rates are already in the mid 3’s, what can the Fed do now? Some economists are predicting rates dropping lower – we won’t know until it happens. Lawrence Yun, chief economist at the National Association of Realtors predicts rates of 3.3% by year’s end. That would put rates at their lowest levels ever, below the 3.31% of late-2012. Barry Habib predicts rates could be the lowest in recorded history – will it happen? No one knows for sure! More than likely we would need to see employment numbers get worse and some signs of inflation for this to happen.
So what to do? Do you wait or do you jump on the bandwagon and refinance your home now? Do you look at buying now? The reality is rates are fantastic – they have gone up just a bit in the last week, but they are still very low. If you are thinking about buying, it is a great time – your buying power is stronger just due to interest rates. I have had clients qualify for more now than they did a few months ago due to the lower interest rates. Should you refinance? Talk to a loan officer and find out – I will tell clients if I think it makes sense for them to refinance. For some it does, for others it may not. It depends on your current interest rate and how long you will be there. If you are thinking about moving in a couple years, it doesn’t make sense to refinance now.
We never know when rates have hit bottom until they start to go up again – by then you have missed the lowest rates. Don’t wait too long if buying or refinancing makes sense for you! Call with questions!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc., An Equal Housing Lender, NMLS#150953 – Email – Website
