19-Jun-19 – Would-be home buyers and homeowners who need to refinance should tune up their mortgage-hunting apps now, experts say.

Benchmark 30-year fixed mortgages nationwide declined to an average of 3.82 percent on June 6 and held there through June 13, dropping home loan rates to a year-to-date low, reported Freddie Mac’s Primary Mortgage Market Survey. Fifteen-year fixed loans fell to an average of 3.26 percent on June 13, down from 3.28 percent a week earlier. A year ago, the 15-year fixed loans averaged 4.07 percent.

Last year at this time, 30-year fixed loans averaged 4.62 percent. In early January 2019 they were 4.51 percent. So, this is the lowest home loan rates have been since September 2017, when 30-year fixed loans dipped to 3.78 percent.

Mortgage rates hit a historical rock bottom on November 21, 2012, when the benchmark 30-year fixed mortgage average fell to 3.31 percent, while 15-year fixed loans edged downward to 2.63 percent, Freddie Mac reported.

Homeowners who financed their home or condominium purchase with an adjustable-rate mortgage (ARM) especially should be shopping now to refinance into the haven of a fixed-rate loan, experts advise.

“The current low rates should provide continued opportunities for current homeowners to refinance their mortgages – which, combined with new home buyer activity, will help sustain the momentum in the housing market in 2019,” said Sam Khater (left), Freddie Mac’s chief economist.

“Mortgage rates fell by a sizeable margin for the second straight week, pulled down by trade tensions with China and Mexico, the financial markets reacting to more bearish communication from several Fed officials, and weaker-than-expected hiring in May,” noted Joel Kan (right), Vice President of Economic and Industry Forecasting for Mortgage Bankers Association.

Despite the less-positive outlook, both purchase and refinance loan applications surged, driven mainly by lower rates. The MBA’s refinance index jumped 47 percent to its highest level since 2016. The refinancing share of mortgage activity surged to 49.8 percent from 42.2 percent a week earlier.

While housing demand is still relatively strong, Kan said there is some restraint from prospective buyers, driven by some economic uncertainty.

The MBA also reported that the average interest rate for a 30-year fixed mortgage backed by the Federal Housing Administration fell to 4.09 percent on June 12 from 4.24 percent a week earlier.

If you are planning to buy a home or condo before higher rates price you out of the market, there are a few facts you should know...

History is on your side. On the positive side, home loan rates are historically low. The annual average rate from 1972 through 2011 was higher than current rates. In 1999, benchmark 30-year mortgage rates were 8.15 percent. In June 2003, lenders were charging an average of 5.21 percent.

Lower down payments are available. New programs at Freddie Mac and Fannie Mae allow the secondary mortgage market gurus to purchase loans from lenders with lower 3 to 5 percent down payments, opening homeownership to more first-time buyers.

More lenient credit scores. The average FICO score for home buyers obtaining mortgages backed by Freddie Mac currently is 750, a relatively high score. However, if a borrower is approved for an FHA-insured loan, the score averages only 700.