With 30-year mortgage rates dropping below 4% on average, now might be a good time to refinance a mortgage loan in Washington State. In fact, recent reports showed that there has been an increase in mortgage refinancing activity in Washington and across the nation, as homeowners rush to take advantage of a dip in mortgage rates.
Mortgage Rates Dip Below 4% in Summer 2017
During the middle of July 2017, something spurred an uptick in mortgage refinancing activity among homeowners. According to a weekly report from the Mortgage Bankers Association, loan application volume increased 6.3% last week compared to the previous week. Looking at mortgage refinancing in particular, applications rose by 13% last week, even though rates at the time were fairly steady.
The average mortgage rate for a 30-year fixed home loan with a “conforming” balance of $424,100 or less held steady at 4.22% last week. And now, a new survey shows that they’ve dipped even lower.
On July 20, 2017, the government-sponsored mortgage buyer Freddie Mac reported that the average rate for a 30-year fixed loan had dropped seven basis points to land at 3.96%. That’s with an average of 0.6 point paid at closing. A year ago at this time, 30-year mortgage loans held an average rate of 3.45%.
Thirty-year loan rates are currently higher than they were a year ago, but they have come down quite a bit since the start of 2017. During the first week of January, Freddie Mac was reporting an average rate of 4.20% for a 30-year fixed home loan. As of July 20, they’ve come down more than 20 basis points since the start of the year.
A Good Time to Refinance a Home in Washington State?
All of which begs the question: Is now a good time to refinance your mortgage loan in Washington State? Depending on your financial situation – including your home equity level and the rate you have on your current loan – now might be a good time to refinance your mortgage.
Of course, this largely depends on your reasons for refinancing.
If you want to refinance your home in Washington in order to secure a lower rate and save money over time, then the math is fairly simple. You would calculate the monthly savings that would result from refinancing and project that over time to see how long it would take to break even and surpass your closing costs. (We can help you with this, by the way.)
MBA Expects Rates to Rise
Looking forward, the Mortgage Bankers Association predicted in June that 30-year mortgage rates would creep upward over the coming months.
Their long-range finance forecast predicts that the average rate for a 30-year home loan would rise to 4.4% by the fourth quarter of this year, and climb above 5% by the middle of 2018.
Granted, this is just a forecast, and it could prove to be inaccurate over time. But the general consensus among economists and housing analysts seems to be that rates will likely rise through the end of this year and into 2018. This means that the mortgage refinancing window could close for some homeowners, if they stay “on the fence” for too long.
Home Prices Are Up Significantly
Home prices are another important consideration when it comes to refinancing a mortgage loan. In Washington State, house values have been on a steady upward climb for the last few years. And while they appear to be cooling down a bit, home prices will likely continue to rise through 2017 and into 2018.
This could put more homeowners in a position to refinance by boosting their home equity.
The math is changing constantly, and that’s why it’s important to speak to a mortgage professional about your current situation. You might be surprised to find out that now is a great time to refinance your home in Washington.