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Rate Update: Is This the New Normal in Terms of Mortgage Rates?


You probably haven’t heard much about interest rates lately because there’s been very little movement in the rates. However, interest rates should be front-page news becausethe lack of fluctuating rates is something we rarely see—and the rates are within striking distance of all-time lows.

In the chart below, the monthly interest rates—according to Freddie Mac’s Primary Mortgage Market Survey—have remained somewhat steady, falling only slightly over the last five months. Although this type of trend is nothing out of the ordinary, the most recent figures from July are noteworthy as 3.44 percent for a 30-year fixed-rate and 2.75 percent for a 15-year fixed-rate aren’t that far off from the all-time lows from November of 2012 (3.35 percent and 2.66 percent, respectively).

In looking at the weekly figures from the last eight weeks, we can really see how stable the interest rates have been. Since the beginning of July the rates have fluctuated only 0.07 percent on a 30-year fixed-rate and only 0.06 percent on a 15-year fixed-rate. Besides being very close to record lows, the rates have been amazingly consistent.

So the big question is this: Because interest rates have been holding steady, does this mean low rates are the new normal? Since there really isn’t a correlation between stability and low rates, we’re probably not seeing a new normal. The rates have been low recently due to global economy concerns, the UK voting to leave the European Union and domestic economic conditions, but the steadiness is probably just an aberration. After all, interest rates have always fluctuated and there’s always something on the horizon that has the potential to affect the rates. In this case, the state of the global economy and whether or not the Federal Reserve raises the federal funds rate will be influential going forward.

For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988.

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