Benefiting from the current rates may not be a bad idea.
As the coronavirus (COVID-19) outbreak stays consistent in the U.S., its effects on various industries also continue with it. Most recently, the pandemic influenced the mortgage rates to drop to another record low.
As part of the coronavirus mortgage rates effect, the 30-year fixed-rate home loan dropped to 3.07 percent. Since March 5, 2020, this marks the fifth time that the mortgage rates have plummeted to a new low. These records are being shattered for the first time since Freddie Mac started tracking mortgage rates in 1971.
While this figure outlines deepening concerns for lenders, it also highlights massive advantages for aspiring homeowners. With that being said, this also creates a narrow window of opportunity for homebuyers before the rates restore to their previous state.
Rates Are Already Going Under the 3 Percent Figure
According to recent reports, some borrowers were able to stumble upon rates that went even lower than this record low. During the Fourth of July weekend, some homebuyers could find rates averaging at 2.94 percent. Persistent shoppers have gone as far as to claim that they were able to find deals at 2.5 percent from select lenders.
To put things in perspective, the 30-year fixed-rate mortgage averaged at 3.75 percent around the same time last year. This outlines a never seen before movement in the market.
Rates Might Be Aligned With Coronavirus Progress in the Country
The real estate industry is restoring its traction with an increase in transactions and buyer demand. However, that may have little effect when it comes to influencing these coronavirus mortgage rates.
It’s because the latest drop in rates comes from the just-as-recent increase in COVID-19 cases across the country. According to experts, an upward trajectory of novel coronavirus cases could indicate a further dip in mortgage rates in the upcoming weeks. With that in mind, things could still take a completely opposite turn.
Signs Indicating a Return to Normal May Trigger Rates to Go Up
With the way that things are progressing, it’s safe to say that the COVID-19 crisis may transcend past 2020. With a possible vaccine’s efficacy projected to be outlined by early 2021, the outbreak is here to stay.
This has caused various business sectors to think of adapting the current situation as a so-called new normal. This normalization could cause the unemployment rate to go down to comparatively acceptable levels. If that happens, it could trigger an increase in these coronavirus mortgage rates. Another reason that may cause mortgage rates to go up is a rise in the stock market. These two sectors are not always aligned. But there have been instances where stock market movement has influenced the real estate industry.
What You Need to Be Aware of As a Homeowner or Homebuyer
If you currently have a mortgage, getting it refinanced at this lower rate might be a good idea. While the process is a bit tedious, it is worth it due to the reduction in overall debt. On the other hand, if you are looking to close on a home, you can benefit from these current rates for years to come.
But in either case, you need to move fast to benefit from the current movement of mortgage rates. Since the rates could go anywhere at this point, it’s only prudent to benefit from them while they are at their current, record low values.