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What The Dip in Mortgage Rates Means for You

Categories: Mortgage Rates | Posted: October 4, 2019

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There are few decisions in life that hit as deeply and as powerfully as investing in a home. New home investment, in particular, requires confidence, and as with most major purchases, timing is everything. Mortgages – the loans used to purchase, refinance or borrow against a home – are key to this equation. In a mortgage agreement, a homebuyer agrees to a set length of time to repay the money loaned, at a certain interest rate and under specific terms and makes payments in monthly installments to offset the loan over time.

Mortgage rates are constantly shifting as a range of market factors dictate continuous changes. Locking in a mortgage when rates are low is a critical, strategic move for home buyers – whether it’s a fixed rate over a certain number of years or an adjustable-rate that takes some time to shift. Even a fraction of a percent will make a difference in what you’re paying the bank on a monthly basis.

When rates plunge or appear lower than they’ve been in some time, the opportunity to pull the trigger on mortgage loans ripens. And now is a time to pay close attention as rates have been steadily low throughout the summer.

According to Freddie Mac data, the present is rich with opportunities for mortgage-seekers. For instance, if you were looking for a $300,00 mortgage in late 2018, just one year ago, you’d be on the hook for $240 more per month than you would if you proceed with your mortgage today.

Rates may not stay low for long – the time to capitalize on historic rates while they’re still out there is now. In all likelihood, forecasts for the remainder of 2019 put rates at about 4.4% by the late fall / early winter. That’s a drop from forecasts earlier this year that predicted rates over 5%. Interestingly, rates have been on a continuous decline since the end of last year. It would seem that, from here, rates can only climb – however it would be atypical for rates to jump steeply. More likely there will be a slow mount as we close out 2019.

mortgage rate chart 2019

There are a variety of macro-economic trends that influence mortgage rates, including global trade, cuts to the Federal Reserve’s rate and what economists call an inverted yield curve.

In layman’s terms, this means that 2-year U.S. Treasury Bonds carry a higher interest rate than 10-year Bonds. This is an economic trend that signals a decrease in mortgage rates. There are all sorts of additional market forces that can precipitate mortgage rate shifts – including everything from major stock indexes to oil prices, both of which bear an impact on the inflation rate and the economy in general. Oil prices, as we know, can fluctuate massively and affect market activity. Even the price of gold can portend flux in the economy. When the price of gold rises, for instance, mortgage rates tend to go down, which is a good thing for buyers.

Of all of these forces, however, the inverted yield curve on Treasury Bond rates is the most closely connected to mortgage rates. At the moment, rates are in the high 3’s – and while it feels speculative to suggest that they may fall to the high 2’s, there are trusted commentators predicting some of the lowest mortgage rates ever. (Or, the lowest mortgage rates in several decades, in any case.)

Long story short – if you’ve been on the fence about whether to purchase a home, September and October are your shining opportunities. The lowest APR mortgage rates in the Carolinas in recent months have been in the low 3’s, with monthly payments of less than $1700.

What does it mean for you to jump on the opportunity that the market is carving out for you with low-interest rates? It means preparing yourself fully for the investment you are able to make in a beautiful H&H home.

Buying a brand new H&H home promises peace of mind that will last for you and your family. It means eliminating all the hassle and income-drain that renting requires of you. As a homeowner, you can take pride and full ownership of how your house is equipped, updated, decorated and maintained. Plus, you can fully move away from the stresses of dealing with landlords, lease contracts, and maintenance that is not on your own terms.

If you are nearly ready to lock in a historically low mortgage rate, you can also get prepared by empowering yourself and your family with choices. Having a dream home to look forward to makes it all the simpler to proceed with a mortgage and a signing.

H&H homes offer an extensive variety of floor plans, communities, and versatile environments to suit families and homebuyers at all stages of life. You can dive into our full suite of options, or search by city on our homepage. We are passionate about building with sustainable, smart in-home systems that save you hassle and money. Check out our extensive homebuyer resources to learn more about our commitment to a positive homebuying experience. We build in the most in-demand communities in areas throughout North and South Carolina, including Brunswick County NCCharlotte NCFayetteville NCGoldsboro NCGreensboro NC, Jacksonville NC, Knightdale NCMyrtle Beach SCPinehurst NCRaleigh NC, or Wilmington NC. Get in touch today to learn more about us.