Investing in real estate during coronavirus? Refinancing a loan? Then you're probably interested in mortgage rates. A word of advice: don't get frustrated with the current fluctuation.
We have good news for borrowers. The fixed-rate-30-year-loan hit a new low to 2.94% last Thursday. Even though this is encouraging to future home buyers, low-interest rates might not stay under an average of 3% for long. Interest rates have gone up and down during the coronavirus pandemic, raising for a moment, when refinancing applications increased. The previous week the interest rates were up to 3.24%, on Friday 5th since reports showed a recovering economy. Now, for the first time ever, the average best case scenario is under 3%, although, these astonishing low rates are given to borrowers with excellent credit and more than 20% equity.
Usually, when bond prices go down, mortgage rates go up, and vice-versa. Early this month, the Fed announced it would continue to purchase mortgage bonds. This will help the U.S. market, and push investors to mortgage bonds. Therefore, when demand increases so do bond prices, the mortgage rates will fall.
Nobody knows if mortgage rates will stay under 3%, but experts do know that it will depend on the country's economy, and to how long the pandemic will last without a vaccine.
Experts' expectations mortgage rates to fluctuate near 3%, making it easier for borrowers to purchase the home of their dreams. In addition, home prices are going down, which makes it even more interesting for homebuyers to do their research and acquire a good deal! However, if you find a property you love, make sure you put in a strong offer as we're seeing more bidding wars than ever before. Work with your agent to find the best offer you can make out the gate to secure your new home!