Homebuyers won big last week as the industry saw the lowest mortgage rates since January 2018. Recent numbers from Freddie Mac reported the average rate on a 30-year fixed mortgage fell to 4.06% percent with an average 0.5 point for the week ending March 28, 2019.
Why are mortgage rates taking a nose dive? Freddie Mac's Chief Economist, Sam Khater, explains that this low point is a crucial indicator that the economy is growing at a slower pace. While there are many global headwinds to consider, “the [U.S.] economy continues to churn out jobs, which is great for housing demand. We have recently seen home sales start to recover and with this week’s rate drop we expect a continued rise in purchase demand.”
If you haven't looked into it already, now is an excellent opportunity for borrowers to lock in their loan at a lower rate. If market rates further decline during that lock period, they can utilize loanDepot’s float down feature to still benefit from the lower rate.
The Fed Says "No More Interest Rate Hikes for 2019"
Getting a mortgage just became cheaper, given the Federal Reserve's decision to put a moratorium on interest rate hikes this year. Economists predict that this decision will stimulate mortgage demand and, therefore, increase home sales in the second quarter CY2019.
Yields on U.S. Treasury notes primarily influence mortgage rates; however, the Fed and the state of the economy also impacts long-term fixed mortgage rates. Locking in the Fed benchmark rate will be more beneficial to homeowners with adjustable-rate mortgages (ARM), and home equity lines of credit (HELOC), which are affected by the prime rate.