As a result of the COVID-19 outbreak, concern for a global economic decline is increasing, causing low interest rates within the housing market.
On March 5, 2020, Freddie Mac released data stating that the national average mortgage rate is the lowest it has been in 50 years, at 3.29% for a 30 year fixed rate mortgage, with an average of 0.7 fees/points paid. The national average rate for a 15 year fixed rate mortgage is down to 2.79%, with an average of 0.7 fees/points paid.
Two days prior to this data being released, the Federal Reserve abruptly cut interest rates, directly affecting how mortgage rates are determined. For the majority of 2018 and the early half of 2019, mortgage rates were typically above 4%. But as economic growth began to halt, the rates began to fall.
The Mortgage Bankers Association has stated that refinance applications have already been seeing a spike in numbers as the rates have started to fall.
Is Now the Time to Refinance?
If you’re considering refinancing, chances are that you’ve already heard about how much you can save over a long period of time. But it’s important to understand that it’s not the best move for everyone. Refinancing comes with fees and costs. If the money you’re going to save over time is less than the money it’ll cost to refinance, then it’s probably not a good idea for you.
Don’t be dissuaded from refinancing if you’ve purchased your home recently. According to real estate data and analytics company, Black Knight Inc., there are over 1.5 million homeowners who originated mortgages in 2018 who may benefit from a refinance, and another 900,000 who originated mortgages just last year.