Last week, Freddie Mac announced that the average 30-year fixed-rate mortgage now sits at 3.45%. This is a three-year low as we saw the cheapest average rate at 3.42% back in October of 2016. According to Black Knight, these numbers means 11.3 million mortgages are refinance-eligible. That’s the second-highest on record.
That number represents any borrower paying interest 0.75% or higher than current rates. These borrows have credit scores above 720 and enough equity in their home. The average monthly savings for someone in this situation would be $268. If all of these mortgages refinanced, that could be an aggregate savings of $3.03 billion a month.
Let’s say we don’t consider the equity or the high credits scores. According to Black Knight, there are a total of 22 million mortgages that can be refinanced at this time.
What is shaking up the market? Worries about the coronavirus have driven investors into the U.S. bond markets. Sending bonds down and, in return, sending mortgage rates down.
This is a perfect time for borrowers to refinance their current mortgage or purchase a home. These mortgage rates will save you a lot of money every month.
With that said, the Millennial generation seems to be closely watching mortgage rates. Refinance activity from this generation fell in December. But even with that drop, refinances were still up 17% year over year, a clear indication of how much lower interest rates were in 2019 compared to 2018. Also, Millennial FICO scores are up from 721 to 728. No matter what, this generation makes up a large share of the current marketplace. It’s important to reach that demographic sooner rather than later.
We will see where mortgage rates head for the rest of the year. For right now, it’s a great time to jump into the housing market.
Courtesy of Mortgage Market Guide
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