The Fed met this week and as expected left rates alone. They also reinforced that they are committed to using all their tools to help support the US economy. What does this mean for mortgage rates?
Mortgage rates are hovering around 3% for a 30 yr fixed rate conventional mortgage. You may even see rates in the high 2’s- lower if you are paying points. So how low can they go? This truly is a million dollar question! We know that based on the market, rates do have room to move lower. However one major issue is volume. The amount of refinance and purchase business right now is very high. Mortgage companies are stretched to the limit to get mortgages done – especially refinances. I know of more than one company that is taking 60-75 days to get refinances done. This is frustrating for everyone, especially clients that are waiting to finish their refinances. And for some, they are seeing rates continue to drop and wondering if they should wait for lower rates. There are also some companies that are raising rates for those that are refinancing. This trend could continue if the volume continues.
So could rates go lower? Maybe, here are some things to consider this year:
- It’s no secret the year 2020 has been a wild ride and it’s only July
- We’ve still got a serious COVID-19 situation and a presidential election to deal with in November
- The stock market that is refusing to read the writing on the wall
- That means there’s a good chance mortgage rates could be even lower later this year
Simply put, mortgage rates tend to do well when economic conditions are poor, or if there’s uncertainty in the air. However, you never know and it can all change in a day!! So if you are thinking about buying or refinancing your home, you may want to talk to a loan officer now and see if it makes sense to refinance now- knowing there is a chance rates could drop – but we never know for sure! If you lock now, you know what your rate will be and if you wait, there is a chance that you could lose that rate. As I tell many clients, if it makes sense to lock now, then lock – if not, wait. It’s up to you! Just know that rates do change and we never know until it’s happened!
Leslie Vanderwerf, NMLS ID#335509, Everett Financial Inc, dba Supreme Lending, An Equal Housing Lender, NMLS#2129 – Email – Website
