The Home Buyer's Korner

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October 16th, 2014

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Average Mortgage Rates for Oct 16, 2014

ratesMortgage rates this week fell to their lowest level since June 2013, reported by Freddie Mac today, as concerns felt in the stock and bond markets roared through economic markets this week.

U.S. government bond yields, which influence mortgage rates, plunged on Wednesday as traders reassessed growth outlooks in Europe and fled to the safety of the U.S. The benchmark 10-year Treasury dipped as low as 1.873% on Wednesday before rebounds later in the day.

Freddie said today, the average 30-year fixed-rate mortgage had a rate of 3.97%, down from 4.12% just a week ago and the lowest since June 20, 2013, when rates averaged 3.93%. Frank Nothaft, chief economist with Freddie Mac attributed the low rates to worries about the European economy

Christian Penner, a mortgage banker in West Palm Beach, Fla., said that on Tuesday and Wednesday his firm had begun to send emails to past clients encouraging them to look at refinancing. He said many homeowners in his area didn’t qualify to refinance the last time rates were low, in part because many owed more than their homes were worth. Now that home values have recovered somewhat, some of those owners might look to refinance, he said.

“This may be the last time, you’ll see these rates again, as many analyst are predicting rates will increase as the economy improves. A survey by the Mortgage Bankers Association released Wednesday found that rates averaged 4.2% in the week ended Oct. 10, without points, a level that was also the lowest since June 2013. 

Four percent is a very important psychological level,” said MBA chief economist Mike Fratantoni. “At certain points, people who aren’t watching the markets every day get prompted to say, ’Hey, what would it look like if I refinanced?’” A micro surge in refinancing applications could create backlogs in loan processing. If you’re thinking about purchasing a home get pre-qualified and your mortgage application started; you don’t have to have a property or a purchase agreement signed to get the ball rolling.

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