As is often the case when the stock market takes a dip, mortgage rates were actually affected in a good way. The average 30-year fixed mortgage rate went down slightly as the market has reacted to the coronavirus outbreak. Of course, what’s happening with this deadly virus is terrifying as it spreads throughout China and beyond its borders. I sure hope they can find a cure soon.
It is fascinating to watch how something like this affects financial markets around the world, and our stock market definitely took a big hit. An epidemic like this will certainly take a toll on our economy as a whole. Slower economic growth like this usually will hurt stocks while helping mortgage rates.
New 3-Year Lows
As of January 31, 30-year fixed mortgage rates officially hit the lowest levels since 2016. They were already low before this latest drop. As the stock and bond markets continue to recover, the mortgage industry will have a nice window where the interest rates should remain low. There’s a chance they could drop even lower before this is through, as we were already on a downward trend before the coronavirus outbreak. In fact, 2019 was the best year for mortgage rates since 2011.
Since last year, it seems we’ve had one incident after another that have helped drive down mortgage rates. From the US/China trade war and the Iranian conflict to Federal Reserve policy changes, these situations have made big headlines and have been good for mortgage interest rates.
What We Can Expect Moving Forward
As we look ahead, however, it’s impossible to know exactly what will happen as things develop with the ongoing trade war and with the coronavirus epidemic. Something could happen that would drive rates up significantly overnight. The stronger the data being collected by the Fed in relation to the bond market (which is what essentially dictates mortgage rates), the more rates are likely to rise. If the data remains weak, then we could see rates drop again to long-term lows.
Any time we see a rate drop like this for any reason, we see an uptick in new home loans and home refinances being processed. It certainly makes sense. If you are in a position to buy or refinance, you can take advantage of these 3-year mortgage rate lows right now.
If you have questions about getting a mortgage loan or want to get started with your mortgage pre-approval application, call Transparent Mortgage today at (619) 701-3906 or email me personally at firstname.lastname@example.org