Mortgage Rates and Our Economy

Dear friends and clients,

Mortgage rates have again done the incredible by dropping close to their recent records lows. Rates have fallen partly due to the government's announcement that they’re ending a widely-loathed fee. The Federal Housing Finance Agency is abandoning its 0.5% fee on refinances. Zillow economist Matthew Speakman said the fee "artificially increased the average mortgage rate."

The average 30-year fixed-rate mortgage is currently at 2.78%, which is cheaper than it’s been since February 18, when the average was 2.81%. The average rate on 15-year fixed-rate mortgages also dropped from 2.22% to 2.12%.

The recent decline in rates is also partly due to the economic uncertainty created by the again growing COVID-19 infections. According to Sam Khater, Freddie Mac’s chief economist, concerns about the COVID-19 Delta variant and the recovery from the pandemic are taking their toll on economic growth.

Economists and investors are closely monitoring any indication from the Federal Reserve that it may begin tapering mortgage-backed securities and bond purchases. In a conference in July, President Biden said his administration would “remain vigilant about any response that is needed” concerning threats to our economy.

“It remains to be seen how long we'll be able to enjoy these rates," says Matthew Graham of Mortgage News Daily. The craziness we’ve seen in the real estate market for the last few months seems to be waning a bit.  New single-family home sales decreased 5% to 704,000 units from 741,000 from May to June, the Mortgage Bankers Association found.

All this means it’s an excellent time to buy a house if you’ve been considering it. These fantastic rates may not last very long, and you don’t want to miss them. Additionally, with some buyers leaving the market, that means less competition for properties.

If you’re a homeowner who hasn’t refinanced your mortgage yet, it’s time to get it done. Start by taking a free peek at your credit score to see where it stands. Then when it’s time to approach lenders, don’t just speak to one. Reach out to at least a few to compare rates and programs.

Remember that late summer and autumn are still great times to buy a home. If you’re interested, click here to see all current local and surrounding homes for sale.

If you’re considering buying a house or have any questions about real estate, feel free to reach out to us at 252-360-1130 or reply to this email. Don’t let the amazing opportunities in our present market pass.

We’re here for whatever you need,

Jason Walters