Homebuyers Act Fast on Plunging Mortgage Rates.
Within the last few months of 2018, mortgage rates began to decline giving prospective homebuyers a glimmer of hope for the New Year.
Rates steadily climbed all throughout 2018 reaching its peak in November at an average interest rate of 4.94% on a 30-year fixed-rate mortgage according to Freddie Mac. Since then, rates started to plunge to their lowest levels in several months.
Home shoppers acted fast in response to more favorable interest rates. According to the Mortgage Bankers Association Weekly Mortgage Applications Survey, applications surged during the first week of January. Mortgage application volume increased 23.5% for the week ending Jan 4, 2019.
Why Have Mortgage Rates Dropped?
It’s important to note that mortgage rates are mostly determined by the secondary market, where mortgages are bought and sold. Which means, interest rates are set beyond the lender’s control.
Many experts identify the low performance of the stock market as the primary reason for mortgage rates dropping. Bankrate.com believes the recent market downturn is causing interest rates to drop because more money is being invested into stable assets, such as mortgage backed securities. Other factors may include the recent government shutdown and slower U.S. and global economic growth.
Take Advantage of Current Rates
According to Transunion, one of the three major credit bureaus, interest rates on a 30-year mortgage will approach 5% by the end of 2019. With many experts predicting mortgage rates to steadily increase all year, now is the time to take advantage while the interest rates are still low.
Find out how much you can save with rates offered by GO Mortgage.