Mortgage rates point today a new historic low today February 24, 2020. The stock market melts down due to fears the coronavirus is spreading, as new cases crop up in Italy and Iran. The virus has reached over 80,000 patients in the world today, the majority in China, but the concern is that nobody can’t stop the spreading of the virus.
As everyone knows, every time there are fears in the stock markets, the investors search for shelter with U.S. Bonds. U.S. bond yields are tanking, pushing mortgage rates that loosely follow the 10-year Treasury yield toward an eight-year low.
The average rate on the popular 30-year fixed mortgage hit 3.34% on Monday, according to Mortgage News Daily. Aggressive lenders will be at 3.25% today, and 3.375% will be the new going rate for the average lender, said Matthew Graham, chief operating officer at Mortgage News Daily.
That rate hit 3.37% for one day in the summer of 2016, before spiking much higher that fall. Before that, rates were this low in 2012. While rates generally follow the 10-year yield, there are certain market factors that keep rates above a certain level.
When rates fall this quickly, it’s not so much that big banks draw the line on mortgage rates, but rather, the underlying Mortgage-Backed Securities (MBS) market refuses to improve as quickly as the Treasury market, said Graham.
The Positive Side
Homeowners are starting to refinance their home loans. Applications to refinance a home loan are up around 165% annually, according to the Mortgage Bankers Association.
To put some numbers in perspective. Today the annual 30-Year fixed mortgage rate is 3.34%. On November 5th, 2018, the same rate got a historic high at 5.05%. This small change, in only 14 months, means to reduce a monthly payment from $539.88 for every $100,000 home loan to $440.16. This means a saving of $99.72 for every $100,000 home loan. If you have a loan of $400,000, your savings could reach $398 per month.
I hope you understand that is time to call your lender and see if there is a chance to make a saving at this time.
Housing Market
Mortgage applications to purchase a home have not been as strong, due to the severe shortage of homes for sale. Instead, Builders might be getting a boost, especially those putting up more affordable homes.
These low mortgage rates and the wage growth are pushing Millenials to take homeownership leading the home buying demand. Last January, the housing market potential increased 4.7% year over year, the highest rate since December 2017, said Mark Fleming, First American Chief Economist.
Also, refinancing your current mortgage should be considered in case you haven’t take advantage of the lower mortgage rates. To learn more about this, read our recent post Tips on Refinancing your Mortgage Loan.
In case you need more information about getting advantages of these low mortgage rates, feel free to contact me
[Form id=”1″]Sources:
• Low mortgage rates drive housing market potential to 2-year high.
https://www.housingwire.com/articles/low-mortgage-rates-drive-housing-market-potential-to-2-year-high/
• Corona Virus fears could push mortgage rates past 4-year low.
https://www.cnbc.com/2020/02/24/coronavirus-fears-could-push-mortgage-rates-past-4-year-low.html
• CNBC Television – Market melts down over coronavirus fears
https://www.youtube.com/watch?v=mBCc5t-bF-o