Whenever we you are about to buy a new home we should always know what is the current mortgage rate. This should be one of your first considerations when looking to purchase a home, so it is extremely important to understand what the mortgage rate is. Basically, the mortgage rate isn’t more than the rate of interest that will be charged on a mortgage.
This is determined by the lender and is fixed in the terms of the loan, so be sure to understand what the mortgage rate is today before proceeding to sign the papers.
Something interesting about this matter is that the average mortgage rate can rise and fall dramatically depending on the current situation of the market. This can change all perspectives of the new homeowners and it all depends on the level of risk when a lender issues a mortgage.
Naturally, there are a lot of factors that affect the current mortgage interest rates in our country.
It’s all based on how high or low the risk is right now. For instance, some homebuyers might consider acquiring a mortgage if the rates are low enough. Nonetheless, you shouldn’t chase mortgage rates right now – they are dropping below 3% for the first time in months.
Let’s understand what’s happening in the real estate market right now.
To this date, in April 2021, the 30-year rate for a mortgage is 2.97% on average. This means that it dropped significantly from the previous weeks and months of this year. In fact, the fixed rate has fallen more than 20 basis points since reaching the highest level last year. Before continuing, it is necessary to comprehend that the rate is different depending on the term of the loan.
For instance, a 15-year fixed-rate mortgage is now 2.20% on average, while a 5-year treasury indexed mortgage is 2.83%.
Still, they are all below 3%, which is surprising due to the current situation in our country. In fact, some sources say that the negative impact of the pandemic regarding new cases might be overshadowing new positive economic information.
But, what does this drop mean?
It is safe to say that the current mortgage interest rates are good news for homeowners who want to take advantage of this environment. This gives an opportunity to lower-income homeowners to access the refinance market.
Therefore, they can reduce their monthly payment, which will lead them to improve their current financial position.
Even though we have historically low rates right now, there are still some buyers struggling to find good homes for sale.
The sales of existing homes fell in March due to the lack of properties in the market. Americans are looking for more space in their homes since the pandemic began. Of course, this is directly related to the social distancing restrictions that we are facing.
Nonetheless, there is information on prestigious websites where we can find data that show the level of new listings rising.
Soon, there will be more options to choose from. This will contribute to maintaining the recent momentum in the United States economy. However, experts say that consumers need to act fast as rates are going to rise during the rest of 2021. The purchase volume for the overall mortgage market will increase in the upcoming years if we manage to sort the difficulties related to the pandemic.
This recent drop in the mortgage rates is a benefit that brought a jump in conventional applications, but maybe it’s not going to last long. This creates the need to be constantly updated regarding the latest news of the real estate market.
However, all of this good news may be overshadowed because of the rising of COVID-19 cases all over the country. So, in order to be aware of all changes and benefits we may get from these lower rates, it is important to get constantly educated in financial matters so you can take advantage of these situations that won’t last forever.