Summary: Mortgage rates have been declining over the past few months, now hovering near historic lows. The question is, where will mortgage interest rates go from here?
Mortgage markets saw a slight uptick of 0.03% last week, though the trend seems to be continuing downward. With the Federal Reserve recently cutting interest rates for the first time since the housing crash of 2008 and trade wars looming with China, it may be of no surprise that mortgage rates are near historic lows and have been on a steady decline since just before the end of 2018.
The 15-year fixed-rate mortgage rate also ticked upward slightly to 3.06% from 3.03% the week before. That’s nearly a full percentage point from the same time last year, when the 15-year fixed-rate mortgage rate averaged 3.97%.
The five-year adjustable-rate mortgage (ARM) rate also ticked downward slightly to 3.31% from 3.32% the week before. At the same time in 2018, the rate was 3.85%.
Low mortgage interest rates along with a more robust labor market are stimulating the economy and consumer spending by increasing their purchasing power and make housing more affordable, which will likely support the housing market over the next few months.
The Federal Reserve’s recent in July meeting to cut rates shows that the central bank is concerned over global economic affairs and tame inflation in the US. In turn, the Fed placed itself in a position to lower the cost of borrowing even more if necessary. The Fed’s benchmark overnight lending rate was moved to a target range of 2% to 2.25%.
It remains to be seen what the Fed will do with rates at its next upcoming meeting September 17-18. If it increases the interest rate, mortgage rates could increase. If not, mortgage rates could continue on their downward descent.
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