The mix of global-market uncertainty and the decision by the Federal Reserve to restrain interest rates has contributed to mortgage rates’ record low levels since May 2013.
Today, according to a survey done by Freddie Mac, 30-year fixed-rate mortgages have sunk to 3.54 percent. The rate for 15-year mortgages is now 2.81 percent. In November 2012 the all-time low for 30-year mortgages was 3.31 percent. In May 2013 the rate was 3.51 percent.
This mortgage rate translates to monthly payments of about $1,130 on a $250,000 home for someone with an excellent credit rating. At a 4 percent rate monthly payments would be about $1,190. Economist do not foresee rates surpassing 4 percent this year.
“We are in a long-term low-rate environment,” said Joel Kan, economist for the Mortgage Bankers Association.
Kan is not expecting any sharp decline in present rates since they have already fallen to reflect “a sense of slowing job growth” as well as the Fed’s hesitation to raise rates.
This is not only a good time for potential homeowners to join the club, but it is also a worth considering refinancing for people who are already locked into a mortgage. The rule of thumb for considering a refinancing option is when a new mortgage rate is about 1 percentage point less than the existing rate, and the homeowner plans on staying in a home for several more years.