Freddie Mac reported this week that mortgage rates dropped yet again this week. Specifically, the 15-year-fixed loans are at a record low. This time last year, 15-year-fixed rates were at 3.07 and now they are at 2.56. 15-year-fixed mortgages are not the most popular types of mortgage, but they are at a rate low enough to temp some people to convert. 30-year-fixed rates, the most popular, are now sitting at 3.35. This is not a record low for the 30-year-fixed. That record low was set in November 2012 when the rate was 3.31. This will likely mean good things for the housing market.
In a statement to CNN, Freddie Mac’s Chief Economist stated,
“Residential fixed investment added to overall economic growth over the past eight consecutive quarters and contributed more than 0.3 percentage points in growth over the first three months of this year,” he said. “[N]ear record low mortgage rates should further drive the housing market recovery over the near term.”
This news comes on the coattails of a federal government announcement that it would continue to buy mortgage-backed securities – $85 billion a month to be exact. This may be good news for new homebuyers and existing homeowners alike. Even for those who aren’t going to refinance their homes, the lower rates boost the demand for homes. With an increased demand, the value of homes will go up. Increased property values is music to many homeowners’ ears, as many owe more on their home than their home is worth.
Refinancing to a 15-year-fixed could also be a good idea for some homeowners. If you’re switching from a 30-year-fixed, the monthly mortgage payments would slightly increase, but the total interest paid out would drastically decrease. After careful consideration, maybe you’ve find that it’s time to refinance your current mortgage or buy a home! Before locking into a rate, find the lowest by browsing Best Mortgage Rates!