Historic Low Mortgage Rates
With all the uncertainty hovering over the current times like a dark cloud, there are a few rays of light filtering through. In the past month, the average mortgage rate in the United States for a 30-year fixed mortgage fell beneath the 3% threshold. Though Colorado has seen rates bordering these numbers in the past, this is the first time in almost five decades that the national average has caught up to us. Also, the average 15-year fixed rate also fell to the mid 2s, the lowest Freddie Mac has reported in nearly 30 years.
Mortgage interest rates will always fluctuate daily and vary by region, but what has led to this historic drop? It is partly due to the private sector, in which investors have poured money into American Treasuries and mortgage-backed securities as a direct correlation to an uptick in Coronavirus cases across the country. However, you may be surprised to find out that it is also due to government programs. The Federal Reserve has continued to support the mortgage markets by purchasing billions of dollars a day worth of securities containing home loans packaged by Fannie Mae, Freddie Mac and Ginnie Mae. With these two sectors coming together as a community to lift up the American homeowner, the rates had nowhere to go but down!
Though mortgage rate aren't the only factor in your monthly payment, it does make a big difference in the amount you'll pay. With many people out of work or working reduced hours at home because of the pandemic, lower mortgage rates are essential to keeping America running. Unlike property taxes and homeowners insurance, you can lock in an interest rate for the life of your loan and know for certain that that rate will not increase over time. If you are curious on how you can take advantage of these new rates, talk to your agent and/or lender about refinancing your mortgage.