More good news folks. Mortgage rates fell again this week, with the 15-year fixed the highlight as it finally sunk into the 2% range.
Yes, you read that right. You can now get a 15-year fixed mortgage for around 2.97%, per the latest mortgage rate survey from Freddie Mac released today.
That’s down from a week earlier, when it averaged 3.04%. It also marks the first time in their survey history that the 15-year has broken the 3% barrier.
A year ago, when mortgage rates were already seemingly rock-bottom, it stood at 3.74%.
If you’re wondering why mortgage rates continue to fall, you only have to look as far as Europe.
Per Freddie Mac chief economist Frank Nothaft, market jitters tied to the ongoing uncertainty in the Eurozone pushed long-term Treasury bond yields lower.
As a result, mortgage rates eased even more. However, much of that perceived carnage seems to be built-in at this point, which may explain why rates haven’t displayed too much movement.
Unfortunately, it’s hurting the economy and the stock market at the same time, so there’s always a tradeoff.
30-Year Fixed Dips Again
The 30-year fixed dipped for a fifth straight week to 3.75%, down from 3.78% last week and 4.55% a year ago.
It has been dropping steadily, hitting new record lows for five consecutive weeks, though it’s only down from 3.91% in January.
Despite being in record territory, there doesn’t seem to be much more room for it to fall. Sure, it may continue to inch down, but the recent movement seems to be very limited.
To put it in perspective, the movement so far this year when applied to a $200,000 mortgage would be a difference in monthly mortgage payment of $18.25.
Of course, the money saved over the life of the loan via interest would be a lot more substantial.
But it still shows that rates seem to have bottomed, even though they continue to trickle down and break a threshold here and there. The next logical stop for the 30-year would be 3.5%, though that seems somewhat unlikely.
ARMs Continue to Be Flat
While fixed mortgages keep improving, adjustable-rate mortgages have been flat all year.
The 5/1 ARM actually increased a single basis point to 2.84% this week, while the one-year ARM remained unchanged at 2.75%.
Back in January, they stood at 2.86% and 2.80%, respectively. So not a lot going on here.
Sure, they can serve a purpose for some, but getting a fixed-rate mortgage below 3% is pretty hard to beat.
Expect a nice little surge in loan origination volume as a result of this psychological threshold in the coming weeks.
Read more: Should you pay off your mortgage early?