Interest Rates Dip to Their Lowest Point in a Year
June 3, 2014
As of today interest rates are at 4.00%. This is the lowest rates have been since June of last year when they were 3.93%. Freddie Mac’s latest Primary Mortgage Market Survey shows for the week ending May 29th, average interest rates for a 30 year fixed fell to 4.12%, which was the fifth straight week that interest rates dropped. Over the last few days some borrowers have even been able to lock in slightly lower than 4.00%, according to the mortgage brokers we work with, Shant Banosian and Jason Anker.
Home Buyers Should Take Advantage of Low Rates Now
These low rates are good news for home buyers. In January when the average conventional rate at 4.53%, a monthly payment on a $350,000 loan would be $ 1,780. With today’s rate of 4.00%, the monthly loan would drop to $1,671 a difference of $109 a month. Home buyers should take advantage of these low rates now before they go back up.
Mortgage rates for so-called jumbo loans (loans above the loan limits set by Fannie Mae and Freddie Mac) are actually lower than conforming mortgage rates. Today’s rate for a jumbo 30 year fixed is 3.97% in comparison to 4.0% for a 30 year conforming loan. This is very unusual. For years, rates for jumbo loans were higher than conforming mortgage rates. Conforming loans have become more expensive because Fannie Mae and Freddie Mac have raised their fees they charge to lenders.
This means home buyers who have good credit and a large down payment and who borrow a little more can get a lower interest rate.
Rates were expected to rise to 5.5% by the end of the year, but Freddie Mac Chief Economist Frank Nothaft said rates would go up gradually, and expects them to rise only between 4.6% and 4.7% by the end of the year.