While mortgage rates have been on the rise, they didn’t move much last week. It is worth repeating that despite the rise in mortgage rates, we are still well below where we were at the same time last year. Low interest rates are good for sellers, as buyers are able to afford pricier homes; this is particularly true in light of the increase loan cap that will go into effect next year. Economists believe the lack of movement in mortgage rates send both good, and bad, signals about the state of the U.S. economy as we enter the holiday season.
The 30-year fixed-rate mortgage (“FRM”) hovered at 3.68% during the week of December 5, 2019; this is the same rate as the previous week. Keep in mind that during the week of December 5, 2018, the 30-year FRM averaged 4.75% (1%, on a 30-year FRM for $700,000 comes out to a $147,501 difference in interest over the lifetime of the loan). The 15-year FRM, dropped from 3.15% to 3.14%.
Buyers are keeping a close eye on mortgage rates, as concerns about an “affordability crisis” begin to hit closer to home. As noted above, a 1% difference represents nearly $150,000 in interest over a 30-year FRM. Many economists expect the rates to stay below 4% in 2020, which is something to be optimistic about.
At the Chernov Team we understand that knowledge is power, and knowledge about how the market will behave is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.