Rate Update: Can the Interest Rates Go Even Lower?
If you’re looking to buy or refinance this year, the current interest rates will play a big part in your financing. With that in mind, let’s look at how the interest rates have been trending and what may be in store in the coming months.
Generally, the interest rates on a 30-year fixed-rate mortgage and on a 15-year fixed-rate mortgage have been fairly steady—and very low—during the winter months. In the chart below—from Freddie Mac’s Weekly Primary Mortgage Market Survey—the rates fluctuated only 0.03 percentage points on the 30-year fixed-rate and only 0.04 points on the 15-year fixed-rate between October and December. Since the beginning of the year, however, the rates have been trending downward and have dropped 0.26 percentage points from December to February.
Except for a period of stable interest rates in the middle of February, the weekly rates also show a downward trend. Between January 23 and February 27, the rates on a 30-year fixed-rate mortgage dropped 0.15 percentage points and the rates on a 15-year fixed have dropped 0.09 points.
The big question is this: Will rates continue to fall or are we close to the “bottom” of the rates, with a rate increase inevitable? Typically, we see lower interest rates in an environment in which the stock market is down, companies are reporting weak earnings and Treasury bond yields are down. However, another factor is at play that has applied downward pressure on the rates: the global economy.
Recent world events—namely the spread of the coronavirus—are affecting several different sectors of the global economy, which in turn has caused a ripple effect that is hindering economic growth worldwide and keeping rates low. How this plays out remains to be seen, but some experts believe interest rates could go down even more in the short term.
As always, keep in mind that interest rates can vary widely, so if you’re thinking about buying or refinancing, talk to your mortgage professional.
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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