It’s A New World For Mortgage Rates
In an unexpected move, Britain voted to leave the European Union.
This is one of the most important developments for mortgage rates this decade. Rates are dropping, and could be on track to undercut all-time lows achieved in late 2012.
Rates were already low in 2016, falling from levels seen the year prior, even as experts predicted rising interest rates.
Thirty-year fixed mortgages are now firmly in the 3s; adjustable rate mortgages have dipped into the 2s.
The question everyone is asking now is, “How low can rates go?”Verify your new rate
What is Brexit?
“Brexit” is the term that describes Britain’s exit from the European Union (EU), a 28-country economic and political alliance.
Britain’s voters also saw membership as a risk.
If the EU went into a financial tailspin, it would likely bring its members down with it. Support grew for an economically independent U.K, starting after the financial downturn of 2008.
Voters approved the exit by a slim margin, but approved it nonetheless.
So what does this mean for U.S. mortgage rates?Verify your new rate
Brexit: Are U.S. Mortgage Rates Heading Lower?
U.S. mortgage rates are heavily influenced by world events. Especially ones that cause uncertainty.
No one knows how Brexit will affect the world economy. There is simply no historical standard by which to measure such a move.
The lack of an economic roadmap has prompted investors worldwide to seek relatively safe investments, such as U.S. mortgage-backed securities (MBS).
Mortgage rates rise and fall based on MBS prices. When investors vie for MBS, demand goes up, and mortgage interest rates go down.
We are now in a period of ultra-strong demand for MBS. The result: plummeting rates.Verify your new rate
All-Time Low For Mortgage Rates?
No one expected 2016 to be the year of falling rates.
Analysts saw rates rising to at least the mid-4s by year’s end. Instead, they have dropped to the mid-3s.
This is having a profound effect on home affordability. A refinance applicant saves about $60 per month, per $100,000 borrowed, for every one-percent reduction in rate.
A home buyer can afford a home that costs ten percent more.
And rates are heading sharply lower after Brexit.
Mortgage rates are rallying, surpassing three-year lows, and right at the heels of all-time low rates in 2012.
The day after Brexit, rates are down as much as 0.125%. Many lenders are offering conventional rates approaching the low-3s.
rates and VA rates are even lower.
This marks one of the single best days for mortgage rates in history.
This is the opportunity for which many homeowners have been waiting. A mortgage refinance now pencils out, when perhaps it didn’t just days ago.
But rates could rise as fast as they have fallen. Markets absorb and process news quickly, often within hours. Consumers shouldn’t assume rates will stay this low.
Homeowners who have been waiting for ideal timing should consider locking in a low mortgage rate now.
What Are Today’s Rates?
Today’s homeowners and home buyers have come upon extremely fortunate timing in which to get a mortgage rate quote. Locking in a rate now means securing one of the lowest rates ever available.
Get today’s live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.Time to make a move? Let us find the right mortgage for you