Mortgage rates found a nice spot and have been hanging out there for three straight weeks. But thanks to the Federal Reserve, it may not be long before rates resume their march downhill.
The U.S. central bank on Wednesday indicated it's had enough of being patient and could start cutting interest rates soon, in the face of economic "uncertainties." Like the trade war.
The Fed's announcement sent a key Treasury bond interest rate plunging, and mortgage rates are likely to follow.
If you're in the market for a new home or a new loan and you spot a low rate, seize the day. You don't want to miss a chance to lock in a low rate.
This week's numbers
This week's average for a 30-year fixed-rate mortgage is now 3.84%, up slightly from last week's 3.82%, says mortgage company Freddie Mac. The benchmark mortgage rate remains around its lowest level in almost two years.
The loans in the survey come with an average 0.5 point.
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What a difference a year makes. In June 2018, homebuyers were getting 30-year loans at an average 4.57%.
The dip in mortgage rates might be presenting you with a good opportunity to refinance, even if you got your current mortgage only last year. Check out today's best mortgage rates where you live.
For the moment, borrowing has cooled. The Mortgage Bankers Association says mortgage applications were down 3.4% last week after soaring 26.8% the week before. Applications for refinance and purchase loans both declined 4%.
Maybe it's just the calm before another typhoon hits lending offices and websites.
Why rates are doing what they're doing
Mortgage rates tend to behave like the yield on the 10-year Treasury note, which dropped below 2% for the first time since 2016 after the Fed issued its statement.
Freddie Mac this week made another adjustment in its mortgage rates forecast and now says 30-year loans will average 4.1% throughout this year.
In February, the company thought 4.6% would be the 2019 average.
"Concerns about global growth and ongoing trade disputes have pushed long-term interest rates lower, resulting in mortgage rates seeing their lowest level since fall 2017," says Sam Khater, Freddie Mac's chief economist.
The forecast also calls for only mildly higher rates next year, averaging 4.2%.
This week's other mortgage rates
Rates on 15-year mortgages have slipped this week to an average 3.25% — yet another new low for 2019. Last week, they were at 3.26%.
One year ago, rates on those shorter-term home loans were averaging 4.04%, Freddie Mac says.
And, 5/1 adjustable-rate mortgages — with rates that are level for five years and then can "adjust" up (or down) every year — keep going down, too.
Those ARMs are being offered at initial rates averaging 3.48%, versus 3.51% last week. A year ago, those starter rates were averaging 3.83%.
When you apply for a mortgage, you'll need down payment money. Find a savings account at a great rate, and start stashing that cash.
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