Mortgage Rates Lowest Yet

Freddie Mac released the results of their Primary Mortgage Market Survey this week and those numbers revealed that mortgage rates have hit a new all-time low. Freddie Mac’s Chief Economist, Sam Khater, said, “While the rebound in the economy is uneven, one segment that is exhibiting strength is the housing market. Purchase demand activity is up over twenty percent from a year ago, the highest since January 2009. Mortgage rates have hit another record low due to declining inflationary pressures, putting many home buyers in the buying mood.” The national average for the 30-year fixed-rate mortgage reached 3.13%, a new all-time low.

Since that survey represents the national average, I reached out to my wife on the subject to learn what she is seeing locally. Dara owns her own company, Dara Delgado Home Loans, and has been originating loans in California for more than 17 years. She is currently on pace to close over 140 loans this year. She is an amazing expert in her field with a sustained pedigree of expertise year after year. Dara let me know that with a credit score of 780 and above, she has rates under 3% for purchase and refi of primary residence or second homes. Since we invest in real estate, I asked her what rates are at for rental properties and duplexes. A no point loan on a single family rental property is at 3.625% and for a duplex it is at 4.125%. All of these rates are great, but the sub-3 rate for buyers of their primary residence is a real eye opener. And that is at no cost - borrowers can achieve even lower rates if they’re willing to pay more in closing costs. It is easy to see why buyer activity continues to be so strong, as many people are eager to take advantage of these historically low rates.

Fed chairman Powell came out last week and stated during a press conference that “not only are we not thinking about raising the Fed rate, we’re not even thinking about thinking about raising the Fed rate.” And while the Fed rate and mortgage rates are not directly correlated, it is an indicator that buyers can expect to see low mortgage rates for the remainder of this year and possibly even all of next year. This factors into a projection that the housing market will remain strong throughout and hopefully play a significant role in helping the overall economy get back on its feet.