As the experience notches in the belt gain in quantity, we have learned the follies of attempting to PREDICT or FORECAST events …. luckily we gave a soft “heads up” that rates MAY be in our corner due to the Corona Virus, and help with longer term Mortgage and other longer term fixed interest rate loans ….
Freddie Mac Reports Lowest Mortgage Rates EVER
According to Freddie Mac….
“The average 30-year fixed-rate mortgage hit a record 3.29 percent this week, the lowest level in its nearly 50-year history. ” 3-5-20
Here is the deal…. rates fell AGAIN in the most recent week due to fears of Economic slowdown from the Corona Virus…. but maybe TOO FAST for Mortgage and other longer termed Fixed Rate loans to adjust … On Friday, after the above rates were calculated, the 10 year Treasury, our guidepost for rates, dropped another 22 Basis Points or almost another 1/4 point …..
Far right, the 10 year treasury yield fell like a rock as fear stoked investment from across the globe…. yesterday for the first time it took a breather as bonds fell and rates rose…no matter, these are Low Low Low rates!
Reach out to your bank, Mortgage Broker, or other refinancing officer, and get your documents in order … begin the qualification process but WAIT (days, not weeks) just a bit and check with your loan professional before locking that rate as it is likely the recent drop in rates has not yet dripped through the loan system…. hopefully better loan rates may be in our very near future…
Here is your friendly reminder on Refinancing or not:
“Think 18 months cost break even – We like to have the saving from the refinance cover the cost of the refinance within 18 months – i.e. Person with $30k mortgage at 5% probably would not need to refinance to 4%, but a $3 million mortgage may be smart to refinance from 4.25% to 4% or the like, if the numbers work out.”
Here is the complete Post which contains 11 items to remember when refinancing!
Take advantage of what cards we are dealt!
Have a Great “All Time Low Rates” Day!
John A. Kvale CFA, CFP
Mortgage Rates, Possible Technique for New Mortgages
With the FOMC (Federal Open Market Committee) winding down their monthly purchases of US Treasury and Mortgage Backed Securities (Pools of Actual Mortgages) it is not surprising to see Mortgage rates, specifically the 30 year rate move up, FOR NOW!
Key Technique for New Mortgages
Mortgage Rates Review
While we may think recent rates are sky high… let’s take a longer term view.
Source: Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MORTGAGE30US, February 22, 2022.
The Short Term View looks much different
Source: Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MORTGAGE30US, February 22, 2022.
Between FOMC lowering their monthly artificial purchases, interest rate markets front running the FOMC and a slight reversion to the mean … rates are higher than recently… but think twice before “buying down” that rate!
Have a Great “Mortgage Rate Analysis” Day!
John A. Kvale CFA, CFP
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Posted in Debt - Debt Management, Economy, FOMC, Interest Rates, Investing/Financial Planning, Market Comments
Tagged FOMC, Interest Rates, Mortgage, Mortgage Backed Securities, Mortgage Rates, Mortgage Refinance