Mortgage rates drop back below 3% — here’s how much Americans could save by refinancing

Benchmark mortgage rates again fell below 3%, giving Americans another option to refinance and secure historically low funding.

The 30-year fixed-rate mortgage averaged 2.95% for the week ended May 27, five basis points less than the previous week, Freddie Mac said
FMCC,

reported this week. A year ago the 30 year loan averaged 3.15%.

The 15-year fixed-rate mortgage fell two basis points to an average of 2.27%. The 5-year Treasury-indexed floating rate mortgage averaged 2.59%, just like the previous week.


As long as inflation remains a problem, there could be volatility in mortgage rates as lenders and bond buyers try to guess what the Fed will do next.

So how much is at stake? Across the country there are many homeowners who could bear to save money by refinancing their shiploads of mortgage loans.

There are currently $ 2 trillion in compliant mortgages – Fannie Mae mortgages. are covered
FNMA,

and Freddie Mac – that could cut their interest rate by nearly half a percentage point if they refinance, Freddie Mac chief economist Sam Khater said in the report.

To put that number in perspective, “Homeowners who refinanced their 30-year fixed-rate mortgage in 2020 saved more than $ 2,800 annually,” said Khater.

How long mortgage rates will remain this low is unclear. The downward move this week is likely a reflection of the market’s reaction to comments from Federal Reserve and European Central Bank officials, Zillow said
Z, + 1.71%

ZG, + 1.39%
Economist Matthew Speakman.


“Homeowners who refinanced their 30-year fixed-rate mortgage in 2020 saved more than $ 2,800 annually.”

– Freddie Mac Chief Economist Sam Khater

“Central banks remain relatively unaffected by the recent sharp rises in inflation and are confident that they can contain the impact of rising prices without hitting the brakes on economic recovery,” said Speakman.

Ahead of these recent comments, he said, “Bond and mortgage rates had risen on tiptoe over the past few weeks as investors grew more confident that higher than expected inflation would actually force the Fed to tighten monetary policy sooner than before. “Specified.”

As long as inflation remains a problem, there could be volatility in mortgage rates as lenders and bond buyers try to gauge the Fed’s next move.

But not only homeowners benefit from the low interest rates.

“Buyers who bought a home last year and got stuck on record-low interest rates will benefit from predictable monthly payments as a hedge against inflation worries,” said George Ratiu, chief economist at Realtor.com.

Low interest rates are likely to fuel the strong demand from home buyers. The good news for them is that there seem to be more sellers entering the market. This will give buyers more choice and should reduce home competition somewhat, which could ultimately help slow the record price growth in the market over the past few months.

Source link

Jack

Read Previous

Belgium Pulls Ambassador From South Korea After His Wife Allegedly Slaps Store Clerk : NPR

Read Next

100 years of ”The Best of the Best”

Leave a Reply

Your email address will not be published. Required fields are marked *