As mortgage interest rates sink, some economists are pointing to the coronavirus' Delta variant as a possible reason for the significant drop. The strain of the disease that led to a devastating global pandemic is on the rise, and is sweeping through the unvaccinated population of the United States.
"Concerns about the Delta variant, and the overall trajectory of the pandemic, are undoubtedly affecting economic growth," Freddie Mac Chief Economist Sam Khater said in a statement. "While the economy continues to mend, Treasury yields have decreased, and mortgage rates have followed suit. Unfortunately, many homebuyers are unable to take advantage of low rates due to low inventory and high prices.
"However, these declining rates provide yet another opportunity for homeowners to save money on their monthly mortgage payment through a refinance," he said
Rates plummeted once again last week, reaching 2.78% for a 30-year mortgage for the week ending July 22, 2021. That's a drop of 10 basis points from the week prior, according to Freddie Mac’s Primary Mortgage Market Survey. Similarly, the average 15-year fixed-rate mortgage rate also dropped, hitting 2.12%, down from 2.22% the week before.
As mortgage rates continue to sink lower, homeowners can take out a mortgage refinance and lower their interest rates before they start to climb once again. Visit Credible to get pre-approved in minutes and find your personalized interest rate.
How long will mortgage rates stay low?
Interest rates have been steadily dipping lower, dropping for the past four consecutive weeks. Economists say the volatility isn't over just yet.
"The Freddie Mac fixed rate for a 30-year loan dropped for the fourth consecutive week, with a noticeable 10 basis point slide to 2.78%," realtor.com Senior Economist George Ratiu said in a statement. "Investors reacted to the mild chaos spurred by Monday’s [July 19] plunge in equity markets, due to concerns about resurgent Delta-variant COVID cases slamming the brakes on the economic recovery, and the Federal Reserve’s lukewarm approach to rising inflation.
"Financial markets experienced wild swings this week, with a steep drop on Monday [July 19] followed by a rally in the ensuing days, which shows that we are in a transitional period and investors are seeking an elusive sense of certainty," Ratiu said. "In brief, we expect to see volatility in interest rates until there is more clarity from the Fed and less danger from COVID to business activity."
It's unclear exactly when interest rates will rise, but experts are beginning to predict it could be sooner than later. The most recent forecast from Fannie Mae shows the 30-year fixed-rate mortgage rates rising to 3.1% by the end of the year. Some Federal Reserve members are now predicting interest rate hikes could be warranted by next year.
If you are interested in taking out a mortgage refinance before current mortgage rates increase, visit Credible to get pre-approved in minutes without affecting your credit score and see your personalized rate quote. Homeowners can also take advantage of today’s mortgage rates and rising home prices to pull money out of their home’s equity and use it for home renovations, pay down high-interest debt, for property taxes and much more.
Expect an increase in mortgage refinances, experts say
Experts currently expect the rate of mortgage refinances to go up in the coming weeks, as borrowers see mortgage interest rates remain low and other refinance benefits begin to come into play, like the recently announced removal of the adverse market refinance fee.
"Closing costs and Fannie/Freddie’s adverse markets refi fee have made refinancing less attractive for homeowners," Ratiu said. "However, the recent announcement that the fee will be eliminated on August 1, might help with transactions over the next few weeks."
To see how the removal of the refinance fee and lower interest rates could benefit you by lowering your payments or decreasing the amount you pay over the life of the loan, contact Credible to speak to a home loan expert and get all of your questions answered.
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