Low-interest rates and your new home.
When you purchase a new home, your mortgage is one of the crucial factors to consider in the overall decision-making process. Since a mortgage is a financial agreement that lasts between 15 and 30 years, the lower your rate is, the better your overall financial situation will be. Currently, mortgage interest rates have dropped to one of the lowest points in the last three years, and they remain some of the lowest rates in history, which means now is an excellent time to consider buying that new home.
Lowest Rate Since Late 2016
In June of 2019, Freddie Mac reported mortgage rates for 30-year fixed-rate mortgages came in at an average of 3.73%. The rate for a 15-year mortgage was 3.16%. While these rates can fluctuate almost daily, this shows a downward trend overall. These drops occurred because the U.S. Treasury note, which dictates the mortgage rates, has dropped nearly 67% throughout 2019.
Mortgage Refinance Applications Are Up
Because of this drop in interest rates, mortgage refinance applications are increasing. The Mortgage Bankers Association reports an increase of nearly 3% in the week ending June 28. New mortgage applications are also increasing, but these do not increase quite as quickly, because it is harder for buyers to time their applications based on mortgage trends, particularly in a competitive market.
What the Downward Trend Means for Maryland Home Buyers
What do these low-interest rates mean for those considering buying a home in Maryland? It means now is an excellent time to jump into the market. Interest rates may change and often without warning, but the current downward trend is one worth embracing.
Combine the low-interest rates with the fact that summer is a time when many homes are hitting the market in Maryland, and you have an excellent market to purchase a new home.
As an example of how attractive the current interest rates are, in 2018, the annual average rate for 30-year fixed-rate mortgage was 4.54%, so these current rates below 4% are a great motivation to purchase or refinance a home. As the adage says “strike while the iron is hot” and right now the “iron is piping hot.” Delaying your home purchase or refinance may result in a loss of opportunity to take advantage of these appealing low rates.
New home buyers need to remember that interest rates are always subject to change. When you are ready to make a purchase, talk to your mortgage provider about locking in the current low rate. If interest rates rise while you are in the process of finalizing your home purchase, you will have confidence that you have your rate locked in, no matter what the market chooses to do.
Are you considering buying a new Maryland home and taking advantage of these low interest rates? Reach out to Drew Gilmartin with First Home Mortgage to learn more about your options and to get help finding the best loan product for your needs.