Mortgage rates drop to new all-time lows
Rates on home loans have gone to a place they've never been before, says Sam Khater, chief economist for mortgage company Freddie Mac.
“The average 30-year fixed-rate mortgage hit a record 3.29% this week, the lowest level in its nearly 50-year history," Khater says in a statement. "Meanwhile, mortgage applications increased 10% last week from one year ago and show no signs of slowing down."
Freddie Mac's previous all-time low rate for America's most popular mortgage was 3.31%, set in November 2012.
Rates have taken a dive from last week, when 30-year home loans were averaging 3.45%. One year ago, the typical rate was a much stiffer 4.41%.
The rates in Freddie Mac's March 5 survey come with an average 0.7 point.
Mortgage rates have been plunging as investors have bailed out of stocks and have huddled into Treasury bonds as a safer investment in case the coronavirus craters the economy. "Much remains unknown with this virus and its potential impact on human life and economic activity," says Matthew Speakman, economist with Zillow.
Bond interest rates have tanked, and mortgage rates tend to move in the same way. Take a look at today's best mortgage rates where you are.
Homeowners have even more reason to refinance
As Khater said, mortgage applications are pouring in, led by a spike in refinance requests. Last week, those increased 26% from a week earlier — and were up a staggering 224% compared to late February 2019.
The refinance boom has lenders beefing up their workforces to meet the demand. Quicken Loans expects to hire "a few hundred new employees" every month this year, and United Wholesale Mortgage plans to add 2,000 people to its staff in 2020, Bloomberg reports.
But many homeowners are still missing out on the refi party, because they're clutching onto higher-rate mortgages.
Data firm Black Knight has estimated that 11.1 million U.S. homeowners could save an average $268 per month by refinancing their mortgages. Black Knight says you're a good refi candidate if you're sitting on a loan with a rate slightly above 4% and your credit score is over 720. (Don't know your credit score? You can check it for free.)
Use the calculator below to see how you could shave your monthly mortgage payment with one of today's lowest-ever mortgage rates.
Other mortgage rates this week
Rates on 15-year fixed-rate mortgages are approaching their own record low: They've fallen this week to 2.79%, on average, down from 2.95% last week, according to Freddie Mac. Those shorter-term loans are a popular refinancing option.
A year ago, 15-year fixed home loans were averaging 3.83%.
Rates on 5/1 adjustable-rate mortgages have dropped for a fifth straight week. Those "ARMs" are fixed for five years and then can adjust up or down every year that follows.
ARMs are currently being offered at an average initial rate of 3.18%, down from 3.20% last week. Last year at this time, the starter rates on ARMs were a steeper 3.87%, on average.