Mortgage rates continue to fall as refinance applications are on the rise. According to Freddie Mac’s weekly mortgage survey, the 30 year benchmark hit 3.66%, down from 3.73% the week earlier. The 15 year fell below the 3% barrier with a 2.98% average.
One year ago, the 30 and 15 year rates were 4.41% and 3.45% respectively. According to Freddie Mac, the all-time low recorded occurred back in November of 2012 when the 30 year note dropped to 3.32%. Current rates match those set in May of 2013.
Global markets are having a tremendous effect on mortgage rates here in the United States. Governments attempt to jump start their economies with various versions of quantitative easing and currency adjustments.
It’s not just the European economies that are having issues. Just last week, China’s stock market dropped the most in six years after the government cracked down on margin lending. And while the Dow has taken it on the chin as of late, the DJIA is still above 17000 and the S&P above 2000.
Investors are putting their funds where they’re safe and the security of choice seems to be U.S. Treasuries and mortgage bonds. If continued weakness in European and Asian economies remains, we could see interest rates fall further still. That’s some really good news for those who just missed out on the refinancing boom or rates hadn’t dropped far enough where a refinance made sense.
With rates where they are today, anyone with a 30 year rate in the 4.50% range should take note. Dropping to a shorter term can also be a benefit by lowering the rate as well as reducing the amount of long term interest paid to the lender.