Mortgage rates have tanked thanks to the Fed, according to reports by CNBC and the Associated Press. Mortgage rates are the lowest in over a year and 19 basis points lower than a year ago.
The average rate on the popular 30-year fixed rate mortgage, which had been sitting for days at 4.40 percent, fell sharply to 4.34 percent today.
Small Rate Drop Means Big Impact on Home Buying
After increasing to over 5 percent in November, this rate news is a welcome sign to home sellers and for Americans looking for a new home. According to CNBC:
Even small rate moves can have a big impact on home buying, especially since so many buyers today are facing overheated home prices and are therefore on the edge of being able to afford a home at all. Looking at the 30-year fixed rate on a $300,000 mortgage, every 25 basis point move down means a savings of $50 on a monthly payment. With the rate now down about 75 basis points from November, that’s a savings of $150 per month.
The drop in rates helps both potential buyers and current homeowners who might be able to benefit from a refinance.
Looking at the 30-year fixed rate on a $300,000 mortgage, every 25 basis point move down means a savings of $50 on a monthly payment.
Visit the CNBC article to read the full article.
Freddie Mac: Lower Rates Should Enhance Affordability
A report by the Associated Press interviewed Freddie Mac executives about the steep drop in mortgage rates, giving an incentive to potential buyers as the spring home buying season opens.
According to Freddie Mac, the average rate on the 30-year, fixed-rate mortgage declined to 4.28 percent from 4.31 percent the previous week. In the interview, Freddie Mac chief economist Sam Khater said:
The lower home-lending rates, combined with continued moderation of home prices, should enhance affordability for homebuyers as the season begins.
Visit the Associated Press story over at The Washington Post.
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