While no one wants to see stock markets in their current turmoil, it simply can't be denied that heightened risk aversion is smiling on mortgage rates yet again.
Average rates are currently at very near to 3 year lows for a 30 year home loan (around 3.5% according to Zillow).
In very basic terms, the current volatility in markets is causing investors to look for safe haven low risk investments, making the bonds market a very attractive destination. As rising bond prices typically cause mortgage rates to drop, we have seen falls from around 4% at the beginning of the year to around the above mentioned current level.
Naturally, this largely unexpected development has important implications for anyone currently buying and/or selling a home, or contemplating doing so.
Predictions at the end of last year all pointed to an increase in mortgage rates to somewhere around the 4.5-4.65% level during this year. However, these were forecasts made before the Chinese stock market went into meltdown pretty much as soon as markets opened their doors in 2016.
Since then, rates have continued on a downward spiral and, while there's an awful lot of time left this year, those 2015 predictions are already being questioned.
Essentially, what I have been saying for some time in my blogs about not delaying a purchase or sale has become even more relevant. Yes, it's possible that rates could still head further south. Equally, however, a sudden rally in stocks or oil prices could have the opposite effect.
So once again it's important to deal in the "now" and recognize the current mortgage market as presenting the most incredible opportunity for buyers to lock in a very, very low rate and for sellers to capitalize on the already high levels of buyer sentiment that will steadily increase for as long as the current favorable circumstances prevail.
A decision to play a waiting game in anticipation of even cheaper home loans is nothing less than a huge gamble.
Why not call us today to discuss how to make the most of these conditions in your own individual situation.