We may be just three and a half months into 2016 but, even if the year ended tomorrow, the story of mortgage rates so far this year would still be absolutely remarkable.
It's probably fair to say that no one foresaw the falls in rates we've witnessed so far in 2016.
Hardly a week goes by without some sort of new milestone having been reached.
Last week we saw 30 year rates dropping to their lowest level in 14 months. Already this week, an article by CNBC argued that there is stronger evidence that rates may be headed for all-time lows!
So what's behind this quite amazing turn of events that wasn't on the radar of any expert commentator before the end of last year?
In short, there is more pessimism about the direction of the global economy, plus nearer to home we have the added uncertainties of a very volatile election campaign to date. When economic uncertainty abounds, investors tend to retreat into safe haven options, including mortgage backed securities (MBS) which has the effect of keeping mortgage rates under control. This is the continuation of the trend we saw for many years, as the Federal Reserve stimulated the market by buying MBS in bulk to keep rates artificially low.
Although the Fed retreated from such support towards the end of 2014, rates never managed to climb really significantly, as a range of international uncertainties offset more positive economic news at home and, thus, the appeal of MBS to investors simply never waned.
And now, with the busy spring real estate selling season well under way, buyers are still able to lock in ultra-low rates, with prospects of rates perhaps dipping even lower! This is consequently a mouthwatering prospect for sellers, who can take advantage of what is, in effect, a double whammy of tremendous buyer incentives to act right now, combined with the low inventory of available homes for sale in this area. It's just a great opportunity to attract multiple offers above the asking price.
Considering that predictions that this year would be the best in real estate for over a decade had generally factored in a steady rise in rates to between 4.5% and 4.65% during 2016, this bodes extremely well for an even better than expected high selling season.
Quite clearly, the overwhelming message to sellers is why wait for something to change? Remember that, just as no-one predicted the quite amazing turn of events that have led to lower and lower rates so far this year, something could suddenly derail that trend. As always, deal with the information that's in front of you, rather than waiting for an even better situation that may never materialize.
If you're buying then the same set of rules applies.
Don't waste a moment and get in touch with us today to make the most of the current unexpected situation.