Mortgage interest rates have been rising from the record low rates that were seen at the beginning of 2021. Good news for those that missed out, rates are showing a dip back towards record lows. Freddie Mac reported the 30 year fixed rates have dropped to 2.88% and the 15 year fixed rates have dropped to 2.22%. These are the lowest levels seen since the middle of February 2021.
"Since their peak at 3.18% in April, mortgage rates have declined by thirty basis points," said Sam Khater, Freddie Mac's chief economist. "While this decline is not large, it provides modest relief to borrowers who are purchasing in a market with strong home appreciation and scant inventory."
The rising house prices coupled with rising rates pushed some buyers back from purchasing. Now that the rates are dropping these buyers hopefully will start actively looking again. George Ratiu of Realtor.com believes the rates will offset the higher home prices.
"For buyers seeking predictable monthly payments, the continuation of low rates will enable them to keep searching for a desirable home with the peace of mind that their housing costs will remain steady for years to come with a low fixed-rate mortgage," he said.
Another positive outcome in the home market is the home inventory is up 5%. Sellers are encouraged by the rising home prices and are now putting their homes on the market.
"The influx of fresh listings is helping moderate record-breaking price growth, presenting more opportunities for buyers. However, affordability will remain a challenge for many first-time buyers, as the monthly payment for the typical home is still $116 higher this week than it was a year ago."
Refinancing dropped in June 2021 due to the rising rates. June 2021 saw refinancing 30% lower than in March of 2021 and 60% down from January 2021. Now since the rates are dipping again, now is a good time for homeowners to revisit refinancing.
If you are in the market for a new home, contact a Realtor who can help with the process from start to finish. This is a great time for potential homebuyers to take advantage of the low mortgage rates.
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