After 2 weeks straight of going nowhere but up, the average mortgage interest rates dropped back down again this week. The average 30-year rate fell from 6.48% to 6.33% comparing to last week (and 3.45% last year). The rate for a 15-year loan fell to 5.52% from 5.73%.
However, it is still significantly high and remains a big hurdle for prospective homebuyers.
Rising Refinancing Demand
Though homebuyers may not benefit much from this news, it did boost the mortgage refinance application up to 5% according to CNBC, which is considered a positive news. However, of course, it’s still 86% lower than last year, which is not surprising considered the market now is very different comparing to the past couple years.
Yet, our team highly encourages all homeowners to consider refinancing if you have the mean to do so due to the fact that a decrease in your rate can help lower the monthly mortgage big time. Especially if there have been major upgrades made to your home, your home appraisal will have a greater chance to increase greatly.
It Barely Benefits Homebuyers
Unfortunately, this news did very little and not enough to excite new homebuyers as the home prices remain high (proof that theories don’t always work). As a result, purchase mortgage application only increased to 1.2% last week according to the Mortgage Bankers Association.
As of last week, the average interest rate of 30-year-fixed conforming mortgage for homes that are in contract was 6.42%, which is lower than the previous week’s 6.58% but way higher than last year’s 3.52%. This the lowest record since 2014; however, the only difference was prices back then are not as high as of now and supplies were also higher as well. Most folks are still in the waiting game to see how prices will adjust upcoming months.
As the Fed releases more consumer price index monthly around 2nd week of every month, rates will be expected to change around these time frames. For the better or worse? No once can really tell.
Want to find out if you’re qualified for a mortgage?
Getting pre-qualified and getting the actual approval from the lender are two completely different things.
Getting pre-qualified or pre-approved by the lender isn’t necessarily guaranteeing that you’ll get the loan but it’s the most common way for them to go over your personal and financial background on the very surface and provide you with a rough estimate of your loan size. As long as all pieces of information you provided to your Loan Officer is as accurate as possible, the final approval should not be an issue.
This step, like I mentioned in my First-time Homebuyer Guidelines article, is indeed the most important step in the purchase journey because it’ll help you build such a strong case for your offering package. And guess what? It’s FREE of charge so make sure you get it done first. If you need help or recommendation, you can reach out to us by sending an email to mortgage@chadvorealestate.com
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