Falling Interest Rates Spur Mortgage Activity
It’s tempting to become obsessed with mortgage interest rates when you’re ready to buy a home. After all, a lower interest rate means a lower monthly mortgage payment.
But don’t let yourself become paralyzed by waiting for interest rates to fall even lower than they already are. Rates, even though they have risen in recent months, are still at historic lows. That makes this a great time to buy a home, in Chicago and across the country.
If you are watching mortgage interest rates, though, know that they recently took a dip. According to a feature story by CNBC, the Mortgage Bankers Association said that the average interest rate on a 30-year, fixed-rate mortgage averaged 4.18 percent during the week ending Nov. 10. That’s a drop from previous weeks, and encouraged home buyers to refinance their existing home loans or take out purchase mortgages.
According to the CNBC story, mortgage applications, including both for purchases and refinances, rose 3.1 percent last week. That’s a nice jump. However, mortgage activity is still lower this year than last, with the bankers association reporting that mortgage applications remain 8.5 percent below a year ago.
The bankers also reported that last week refinance volume hit its highest level in a month, jumping by 6 percent. Of course, refinance activity is down significantly from last year, 24 percent, because interest rates were lower in 2016.
If you’re waiting to buy a home because you’re hoping for even lower interest rates, you might be making a mistake. That 4.18 percent rate on 30-year mortgages might be higher than the rates near 3 percent we recently saw. But it’s still historically low. There was a time, remember, when a rate of 7 percent on 30-year, fixed-rate loans was considered a good one.
So if you’re ready to buy, don’t let rates stop you. No one can predict where interest rates will go in the future. But we can say that rates, even though they are slightly higher, are still incredibly attractive.