Unless you have been living under a rock, you are aware that the U.S. is involved in a trade war with China; you are also probably aware that the ongoing trade war has impacted the overall economy – prompting the Fed to reduce rates at least twice more before the year is through.
The 30-year fixed-rate mortgage (“FRM”) stayed at 3.6% in the week of August 8, 2019 (this is a significant reduction from the previous week, and the lowest since 2016). Similarly, the 15-year FRM dropped significantly to 3.05%.
Last week, the Fed reduced rates (which are currently reflected in prevailing mortgage rates), but this week’s decline in 30 and 15-year FRMs is largely attributed to shaky investor confidence in light of the escalating trade conflict between the U.S. and China. Ultimately, home buyers won’t see too much of an impact in their pursuit of home, however, as supply is still very low.
If you have the ability to purchase a home, now is an excellent time to do so; in the short- term, we can expect housing prices to decrease as the country adapts to the trade war, but the rates are about as low as we can expect them to be – rates that will certainly go up once the trade war is resolved. This likely explains the recent uptick in home loan applications and refinancing.
At the Chernov Team we understand that knowledge is power, and knowledge of how the market is responding to the escalating tensions between the U.S. and China 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.