Mortgage rates continue to move downward as COVID-19 causes concern for individuals and businesses. The stay-at-home actions taken by state and local government to control the spread has left many homeowners wondering how to get through this health and financial pandemic.
Mortgage rates have dropped.
Fixed mortgage rates started falling in January of 2020, and by the end of February, the average 30-year fixed-rate mortgage fell from 3.49% to 3.45%. Mid-March, the average 30-year fixed-rate mortgage, jumped to 3.90%. Looking at the market performances, the current mortgage rates are lower compared to the same time last year when 30-year fixed-rate mortgages averaged at 4.35%.
To stabilize the markets, the Feds have continued to reduce rates to stimulate the economy and assist those impacted financially by the coronavirus. Regions experiencing the highest outbreaks of COVID-19 are seeing lower mortgage rates as financial institutions step-in to help borrowers with economic hardships.
Today, borrowers looking to refinance using short term mortgage loans for faster payoffs with lower interest rates may consider a 15-year fixed-rate mortgage. During the first part of March, the 15-year fixed-rate increased from 2.77% to 3.06%. Mid-month, the 15-year fixed-rate mortgage rate increased to 3.90% compared to the average 15-year adjustable-rate, which fell from 3.25% to 3.20%.
Across the country, mortgage rate loans have hit historic lows during the past two months. The recent short-term rise in mortgage rates is attributed to the demand for refinancing and new home purchasing. Although the rates are at an all-time low, keep in mind, these average rates do not include extra fees (points) that borrowers will pay to get lower interest rates. Point percentages are calculated on the loan value. For example, 1 point equates to 1 percent. If the point value gets you a lower interest rate that reduces your monthly payment, it is beneficial to your financial health.
Bottom-line, lower rates are good news for homeowners – making home loans more affordable and helping to manage the onset of recent financial burdens. If you are worried about making the next mortgage payment as a result of COVID-19, the timing couldn’t be better to refinance. Lower interest rates now offer new home buyers an incentive to get the home of your dreams for less money. Variable-rate mortgages could provide lower mortgage payments for the short-term with an option to convert to a fixed-rate down the road. If you’ve built equity in your home, these lower rates may offer affordable second mortgages or equity credit line options.
Moving forward, the current economic condition foresees the COVID-19 recovery extending beyond the fourth quarter of 2020. Market forecasts are projecting mortgage rates to remain below 4.00% through the end of the year. One factor influencing the rise and fall of future mortgage rates is how the real estate market responds to the economic challenges.
In difficult times, every financial situation is unique. Contact your team at First Lenders and ask about the available options for your circumstances. We are offering COVID-19 vulnerable workers an opportunity to prevent foreclosures.