No news is great news for homeowners: Mortgage rates are holding steady this week, not far from their lowest level on record. So it's not too late for owners who've been meaning to refinance and cut their monthly payment and interest costs.
Average mortgage rates are nearly a full percentage point lower than they were last year at this time, according to a popular survey — meaning you can save money by refinancing even if you currently have a home loan you took out in the spring of 2019.
When you're comparison-shopping for a new loan and spot a mortgage rate that could save you a pile of money, lock that rate and don't let it get away.
Mortgage rates are flat, near their all-time low
Mortgage rates are unchanged this week with rates on popular 30-year fixed-rate mortgages still averaging 3.33%, mortgage giant Freddie Mac reported on Thursday. That's not too far above 3.29%, the record low reached last month in Freddie Mac's weekly survey that dating back to 1971.
The survey rates come with an average 0.7 point. Last year at this time, the typical rate on a 30-year fixed mortgage was 4.12%.
The benchmark mortgage rate shot as high as an average 3.65% in mid-March before dropping back again. Rates are likely to stay down going forward, says Sam Khater, the chief economist at Freddie Mac.
"This year the 10-year Treasury market has declined by over a full percentage point, yet mortgage rates have only declined by one-third of a point. As financial markets continue to heal, we expect mortgage rates will drift lower in the second half of 2020," Khater says.
Mortgage rates closely track the yields, or interest, on 10-year Treasury notes. The yields have been sinking and bond prices have been rising while the Federal Reserve buys up bonds to help stabilize the economy in the face of the coronavirus crisis.
The Fed also slashed an influential short-term interest rate to near zero last month, which has created an environment for low interest rates, including mortgage rates.
Homeowners hold back on refinancing
Despite current mortgage rates that at one time may have seemed impossibly low, the mortgage refinance blitz has slowed.
Homeowners are holding back on refinancing, even though research has shown they often can lower their monthly house payments by hundreds of dollars by moving into a new loan at one of today's ultra-cheap mortgage rates.
LendingTree recently estimated that a homeowner who refinances a mortgage taken out just last year can save $60 a month for every $100,000 borrowed.
“A mortgage refinance, particularly at these historically low rates, presents an attractive opportunity for homeowners,” says Tendayi Kapfidze, LendingTree’s chief economist.
But refinance applications fell 19% last week after surging 26% a week earlier, according to the latest report from the Mortgage Bankers Association.
During these unsettled times, the trade group says we're likely to keep seeing "swings" in refinancing.
Other mortgage rates this week
Rates on other popular types of mortgage loans are little changed.
The average for a 15-year fixed-rate mortgage has slipped this week to 2.77%, according to Freddie Mac. Last week, the typical rate for those loans — which are a popular refinancing option — was 2.82%. At this time in 2019, 15-year fixed home loans were averaging 3.60%.
Rates on 5/1 adjustable-rate mortgages have gone up for a third week in a row. "ARMs" are fixed for five years and then can adjust up or down each year.
ARMs are currently being offered at an initial rate of 3.40%, same as last week. One year ago, the starter rates for those loans were averaging 3.80%.