Real Estate News

Mortgage rates continue to hover near 2017 lows

Published: 24 Aug 2017

Experts repeatedly warned consumers that mortgage rates were supposed to rise slowly but surely over the course of 2017, to levels not seen in the housing market in some time. After all, rates in the 3 percent range were an historical anomaly, and were never going to last forever. However, even after a spike in rates seen in late 2016 and into the first few months of the new year, rates have continued to sink back toward lower levels.

Part of the reason for this is that the economy is largely in great shape - unemployment is near some of the lowest levels seen in a long time - but other issues still linger, according to the Boston Globe. Shortly after the election of President Donald Trump, experts began to predict business-friendly changes that would lead to higher rates in the long-term, and mortgage rates spiked by nearly a full percentage point in just a few weeks.

But since then, the lack of tax reform and infrastructure investment that many expected led rates to fall once again, and they now sit only slightly above where they were just prior to the recent election.

Experts expect low rates will last for at least a little while longer.Experts expect low rates will last for at least a little while longer.

Good news for buyers and owners alike
As rates have remained low, that's been good news for anyone seeking a mortgage in the past few months, but housing activity has been a bit of a mixed bag. According to the latest data from the Mortgage Bankers Association, there was a 0.5 percent weekly decline in overall home loan application activity nationwide in the week ending Aug. 18, despite a 0.3 percent uptick in refinance requests in particular.

This came as rates slipped somewhat during that seven-day period, and now the share of the overall mortgage market taken up by refinances is approaching 50 percent once again, the report said. It's also at the highest level observed since January, highlighting the fact that owners still recognize a good opportunity for cutting their mortgage costs when they see it. As for the declining activity in purchasing, it could be falling because of just how constricted the national inventory of homes for sale has become.

A lingering deal?
Fortunately for those who might be thinking about getting into the market in the near future, but aren't ready to do so yet, it seems that experts believe rates will at least hover at or around today's low levels for some time to come, according to Bankrate. While rates are largely holding steady from one week to the next right now, they're down a little more significantly from where they were even a month ago, and experts mostly expect continued moderation or only slight increases in the week ahead.

The sooner consumers can get into the market and either lock in a new, lower rate on an existing mortgage or make a purchase with an affordable rate attached, the better off they will be when it comes to keeping their ongoing home loan payments low. That, in turn, can help them reduce their risks of delinquency and default, while simultaneously giving them more money to devote to other aspects of their finances.