Over the past few months, we’ve seen mortgage interest rates drop to some of the lowest levels in three years. The Federal Reserve recently cut rates that most significantly impacted short term rates for things such as student loans, but mortgage interest rates have fallen as well due to economic factors and a general slowing of home sales. Rates for a 30 year mortgage are averaging around 3.5% as compared to around 4.125% a year ago. Summertime going into fall is typically a busy time for home sales, so this rate reduction is good news for many potential homeowners.
Because of these falling rates, mortgage refinances are also seeing a three year high as many people are able to save money on their monthly payments. It’s also been a good time for homeowner’s to consider a cash-out refinance to take advantage of the low rates and their home’s rising equity to use funds for things such as paying off debt or renovations.
It’s unclear as to whether future rate reductions are coming. If the Federal Reserves sees an economic slow down and possible recession, it’s likely that rates would drop even lower, but they also stated that they believe this rate reduction will be sufficient for maintaining economic strength. My advice to anyone looking to buy a home would be to strongly consider doing so within the next few months. Additionally, for any current homeowners, I would recommend you consult with a trusted Mortgage Banker to analyze your current mortgage and see if you could save money with a refinance. I’ve been able to offer many customers a no cost refinance, which clearly is a win-win. If I can be of any assistance, please feel free to contact me.