If you own a car, you’ve probably started noticing that a certain rate has been going up. Yup, the price of gas is up. Averaging more $2.36 a gallon across the country (and more if you live in more urban areas), it looks like the days of endless cruising are over.
One rate that hasn’t started going up? Mortgage rates. In fact, they’re pushing close to all-time lows. The final count on Thursday indicated that levels had gotten to their lowest point in a three-year period. A conventional 30-year fixed-rate mortgage was looking at a rate of 3.375 percent. That’s a number that matches the yearly low set in February…but the previous instance only lasted for a few hours.
Many loan originators, unsurprisingly, advised locking that rate in.
“Overnight we saw the benchmark 10-year break below a key level of resistance at 1.70, but it has run into another brick wall at 1.66,” said Victor Burek of Churchill Mortgage. “I advised locking yesterday, and with the improved rate sheets this morning, I think locking continues to make sense.”
Still, some thought there was potential for even lower rates and saw a reasonable opportunity for those willing to float a bit longer.
“Pricing has improved well enough today to warrant strong lock considerations,” began Constantine Floropoulos—Vice President of The Federal Savings Bank—on a more predictable note. But he continued: “Depending on your timetable to close I favor floating as I feel this rally still has some legs.”
Well then. If things truly can go any lower, as we mentioned, we’d be looking at all-time lows for rates.
Part of the reason why rates dropped again after four weeks without a decrease is because of the disappointing results we saw in the employment report released last week. The economy only created 38,000 new jobs, significantly less than expected.
Janet Yellen used the news to suggest that The Fed would be hesitant to raise benchmark rates when it meets next week. Instead, she noted the positive movement in housing.
“Both home sales and construction have been gradually improving,” she said. “Housing has been supported by low mortgage rates, and while mortgage credit is still difficult to obtain for households with low credit scores or hard-to-document income, those with good credit histories are generally able to borrow at very favorable terms.”
It looks like those “very favorable terms” will remain in place for the near future.