The coronavirus has created much havoc around the globe. America has hit a highly significant unemployment rate and efforts are being made to help improve the economy. However, real estate has been booming since the start of the Coronavirus.
On July 21st, The Federal Home Loan Mortgage Corporation (FHLMC), known as Freddie Mac, reported that mortgage rates hit a record low for three consecutive weeks, dropping all the way down to 3.03%. This rate is the lowest reached point in history dating back to 1971. This news is HUGE if you are looking to purchase a home or refinance your current one. The current mortgage rate would allow you to save significantly more money than you typically would. In addition, the current rates also benefit sellers significantly as existing home sales increased 20.7 percent for all property types.
According to one Michele Harmon Team’s preferred lenders, Jessica Taylor, The average rate for a 30-year fixed rate mortgage in November of 2018 was 4.94%, which is significantly higher than today’s 3.03%. Despite these historically low rates, you may still be on the fence about buying or refinancing a home. Michele Harmon Team is here to help answer your questions about whether or not buying, selling, or refinancing is currently a smart decision for you and your family’s specific needs and goals.
How do interest rates work?
Understanding interest rates is key to making a decision on whether purchasing or refinancing a home is currently in your best interest. Interest rates peaked in November of 2018 and started to fall through 2019 and have continued to fall since the start of 2020. We cannot be certain about what the future may hold, although interest rates are expected to remain low throughout 2020. For those looking to purchase a home, you may be able to own a home for significantly less than the average cost of rent. For current homeowners,if your current rate is equal to or above the national average, it may be smart to consider a review. Try reaching out to one of our preferred lenders to see what rate you may qualify for.
Download our recommendations for lenders here.
Sellers can benefit from the currently low mortgage interest rates as well due to the increased housing demand.
Is now the right time for me to purchase?
Tons of analysis and debate has been presented on the news about where the stock market is headed in the COVID-19 environment. However, many have not received education on the housing market and whether or not now is the right time to buy a house. Housing prices have risen steadily over the past two decades and median listing prices are 5.6% higher than they were a year ago. At this current time, the only thing we know for sure is that the rates are historically low now and we may not have the opportunity to take advantage of low rates in the future. If you are looking for the lowest available pricing options, now may be the best time for you to purchase a home.
Should I refinance my home?
Just a small change in your interest rate can result in valuable monthly savings. Are you planning on being in your home long enough to break even after closing costs? If so, refinancing may make sense for you. When looking at your refinancing options, you can choose to opt for the lowest monthly payment or the shortest term to pay the loan off as fast as possible. Be sure that you know exactly what your financial goals are before starting the refinancing process. Here are some reasons you may want to consider refinancing:
- Take control of your debt.
- Refinance your investment property
- Renovation Refinance
Check out this chart to see what your mortgage payment could look like with today’s rates vs. the average rates in previous decades.
Is now the time to sell?
If you have had a dream to move to a new area,have outgrown your current home, or you are looking to sell your home quickly, the current mortgage rates can help you because there is more demand and more qualified buyers with fewer financing complications. In other words, lower rates means more qualified buyers.
The Bottom Line
It is important to consider if purchasing or refinancing your home is currently in your best interest. The current mortgage rates and market demand are not only beneficial to homeowners and potential buyers. Each home that is purchased will help drive a more positive and healthier economy. If you are looking to refinance, contact one of our recommended lenders in the document provided above for assistance. If you feel that you are in a position to buy or sell a home this year, call Michele Harmon Team at 713-818-1330 and we will be happy to assist you while rates are still historically low.