Rate Update: Will Interest Rates Continue to Be Low?
March 21, 2019
With the spring and summer buying season right around the corner, now is a good time to take a closer look at interest rates in terms of how they’ve been trending and what we might see in the next few months.
Recent Interest Rate Trends: According to Freddie Mac’s Primary Mortgage Market Survey, the rates on a 30-year fixed-rate mortgage have generally been trending down since the middle of last November. Since reaching a high of 4.94 percent for the week of November 15—which was the highest the rates have been since 2011—the rates have slowly fallen over the past three-plus months. Currently, the rates are at 4.35 percent for the week of February 28, which is the lowest they’ve been since February of last year.
Why have we been seeing declining rates? One reason is that the 10-year Treasury note—which is closely tied to mortgage rates—has seen a rise in demand and prices since last November due to concerns about slowing global economic conditions. As demand and prices rise for these bonds, yields fall and mortgage rates often follow suit. Another reason for the recent slide in interest rates may be that the Federal Reserve has walked back its previous statement that multiple hikes to a key rate would be forthcoming in 2019.
Interest Rate Outlook Going Forward: Although the Fed’s announcement of a pause in future rate hikes is certainly subject to change, it’s not likely that an about-face will happen within the next couple of months—and that’s good news for those who are looking to buy a home or refinance their mortgage this spring. Last year’s three rate hikes by the Fed were instrumental in mortgage interest rates rising from 4.0 percent on a 30-year fixed at the beginning of the year to close to 5.0 percent last November, so a pause in rate hikes should mean lower mortgage rates in the short term.
However, other factors are always in play when it comes to mortgage interest rates—such as the yields on the aforementioned Treasury bonds—and predicting interest rates two or three months out is always difficult. For example, a majority of experts predicted that interest rates would rise well into the 5.0 percent range in 2019, which may not happen. Concerns about both the U.S. economy and the global economy can crop up at any time and have an immediate impact on rates. In the end, if you’re looking to buy or refinance and take advantage of the current interest rates, sooner may be better than later.
As always, keep in mind that interest rates can vary depending on your particular area, the type of loan you’re getting and your credit profile.
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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