Low mortgage rates extend for another week, giving borrowers more time to save big

Low mortgage rates extend for another week, giving borrowers more time to save big

Mortgage rates stay low a bit longer, giving borrowers more time before an expected rise, according to a long-standing weekly survey.

With the economy showing signs of recovery, forecasters expect higher rates to come.

Meanwhile, rates just above all-time lows are helping eager buyers increase their housing budgets and leaving homeowners behind. reduce their monthly mortgage payments, usually in the hundreds of dollars.

Low rates hold up

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Mortgage rates last week averaged 2.73% for a 30-year fixed-rate loan, unchanged from the week before, mortgage giant Freddie Mac said Thursday.

While rates are still above last month’s record low, they are miles below what they were a year ago when the average was 3.45%.

The rates of other popular mortgages barely budged last week, according to the Freddie Mac survey.

The average of a 15-year fixed rate loan edged up to 2.21% from 2.20%. These mortgages, a preferred choice for refinancing, was on average 2.97% at the same time last year.

Starting rates on 5/1 variable rate mortgages, or ARMs, were on average 2.78%, down from 2.80% a week earlier. A year ago, the average was 3.32%.

How long will it take for the rates to appear?

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Forecasts indicate that rates will rise in the coming months, with Freddie Mac predicting mortgage rates to average nearly 3% this year.

But, the near-term outlook for rates is still a bit hazy, as “economic data and pandemic-related developments paint a contradictory picture of the way forward for the economy,” says Matthew Speakman, economist at Zillow. .

“The job market remains deeply hurt, as concerns about new variants of the virus have intensified and the fate of the next wave of tax breaks is currently shifting,” Speakman said.

But yields on treasury bills – the interest rates that usually dictate the movement of mortgage rates – have been rising steadily for months.

Homeowners still have time to save

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But as long as low mortgage rates persist, homeowners can cash in.

“Although many have already refinanced, the evidence suggests that higher income homeowners took more advantage of this opportunity than low income homeowners who could benefit the most by reducing their monthly mortgage payments,” says Sam Khater, Chief Economist. by Freddie Mac. .

More than 19 million mortgage borrowers could still save on average $ 308 per month refinancing now, says Black Knight, a mortgage technology and data provider. Good candidates are those who have a strong credit rating and at least 20% of their home equity.

If you find and compare offers from at least five different lenders, you can save thousands of dollars in interest on your mortgage, according to studies by Freddie Mac and others.

If you continue to compare prices when buying or renewing your home insurance, you can find the coverage you need at a much lower price.

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