Are Falling Rates of Mortgage in U.S. Good News for Homebuyers or Long Term Issue?

Falling Rates of Mortgage in U.S. - Why Homebuyers Should Rejoice

In a recent Freddie Mac survey, the United States mortgage rate for 30 years fell again. The report is focused on home buy loans, meaning that refinance rates could be higher.



According to Freddie Mac, this week's fixed-year mortgage rate dropped by two basis points to 2.96%.

The US economy plummeted after the pandemic of coronavirus in 2020, with mortgage prices plummeting. This pattern changed in 2021, with the economy's turnaround, but the prices began to decline again in April. The end of this year is also expected to be higher prices, but historical expectations are projected to stay strong.

"Mortgage rates remain under 3 percent for the third week in a row. The 30-year fixed-rate average fell for the fourth time in the past five weeks and now stands at 2.96 percent." [1]

Freddie Mac's Amount Difference

The average 30-year rate also plummeted to 3.16 percent in a separate banking rate survey. The difference with the amount of Freddie Mac is because the percentage of Bankrate is 0.32% of points and the initial payments, although that figure is not included in Freddie's figure. Freddie Mac said his rate is 0.8 of a point on average.

Sam Khater, the chief economist of Freddie Mac, said in a tweet, "The mortgage rates stayed below 3 % for three weeks in a row."

"There is a recovery of consumer income and expenditure, resulting in economic growth acceleration. The mix of low, affordable prices and a better economy is ideal for home buyers. It is also beneficial for homeowners who have skipped priority refinancing and monthly cash flow prospects.

Khater said lower mortgage and real estate are fine.

The lower mortgage prices for refinancers are fine, as Khater said, but the current demand is more mixed for future homebuyers. Low mortgage rates remain a factor, but reduced housing supply combined with increased borrowing capacity dramatically boost costs and increase competition in most areas. In particular, low-income and minority homeowners may be reluctant to buy mortgages and real estate.

The report is focused on home buy loans, meaning that refinance rates could be higher. The price change in December of the refinancing deals adds to the costs. This reduction is 0.5 percent of the debt sum for all Fannie Mae and Freddie Mac refinancing. That is 1,500 dollars in loans of three hundred thousand dollars.

With an average of 0,6 percentage, the 15-year average fixed rate dropped to 2.3%. The figure was 2.31% a week ago and 2.73% a year ago. For an average of 0.3 points, the adjustable rate of 5 years increased to 2.7%. The figure was 2.64% a week ago and 3.14% a year ago.

Mortgage rates deflect in the past 7 days.

Matthew Speakman, an economist in Zillow, said, "Hypothecs have fallen marginally again this week and have pushed yields to their lower-level since mid-to-end February.

"The mortgage rates, as well as bond rates that affect them, see no justification to change substantially over the past seven days with little surprises this week's economic and pandemic-related developments.

RESOURCES:

[1] https://www.washingtonpost.com/business/2021/05/06/mortgage-rates-remain-under-3-percent-third-week-row/

Original Source of the original story >> Are Falling Rates of Mortgage in U.S. Good News for Homebuyers or Long Term Issue?


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