The average 30-year fixed mortgage in the U.S. touched a 19-month low, slipping from 3.87% to 3.73% last month.The average 15-year mortgage rate also took the hit, slipping from 3.15% to 3.05%.
Last year, during the same period, 30-year mortgage rate stood at 4.51% and the 15-year mortgage rate at 3.5%.It shouldn’t come as a surprise if the rates continue to plunge even further, reaching to 3.59%, its lowest level since May, 2013.
As per the market dynamics, lowering of the rates should have provided a jolt to the housing market by pulling in those borrowers who wouldn’t venture into homebuying with the usual rates. But the rise of mortgage applications over the last few weeks is, at best, moderate. Market analysts have suggested that the shortcoming for first-time buyers is not the mortgage rate but getting qualified for the mortgage or taking out the down payment.
Market experts are attributing the decline to the bond yields that recently hit record low levels. But there’s more – The tumbling oil prices are causing a crack in the key global economies, which in turn is resulting into a growing skepticism regarding treasury yields, eventually affecting the mortgage market.
On a positive note, lenders have started sensing a notable pickup in the refinancing activity. The plummet is also a good news for those U.S. homebuyers who are looking to get their mortgage refinanced. Now that mortgage rates have dropped to a 19-month low, this is perhaps the best time to refinance.