It there is one thing certain about the days we’re living in, and that is these times are full of uncertainty. Both, personal and economic life have been thrown for a loop as of late. However, in the midst of all the present uncertainty, a couple of things remain certain. The stock market is as volatile as ever, as we have recently seen. And interest rates look to remain low, which is good news for home buyers, of course. But what, exactly, will happen to interest rates in 2020 for Roseburg home buyers?
Early 2020 Drop in Interest Rates
You may have heard that the Fed cut interest rates in February in response to the coronavirus situation in an effort to bolster the economy. Then in March, the Fed cut rates again, this time bringing them to near historic lows. It very much looks like the forecast for April is to expect mortgage rates to fall below March levels to somewhere around 3.5% or lower for 30-year mortgages.
So let’s take a look at the “why” and what lies beyond . . .
Early 2020 Interest Rates Climate
Here’s a snapshot of what things looked like early this year with respect to interest rates: The “the 30-year fixed-rate mortgage averaged 3.373% APR on Feb. 28. It moved upward, but lingered below 3.5% for a week and a half. It rose further on March 10, reaching the month’s high of 4.113% on March 20. That was a jump of about three-quarters of a percentage point in just three weeks.”
Now, that rise in rates was mostly attributable to shakeout in the bond market and lenders having to deal with late February’s surge in refinance applications. Basically, raising mortgage rates slowed mortgage applications and gave them a way handle the number of applicants they were already dealing with.
Current Interest Rates in 2020
So, now today… Interest rates in 2020 are lower. The Fed cut interest rates again in March, and that cut is now reflected in mortgage interest rates.
“On Friday, April 3, 2020,” market watchers tell us, “the average rate on a 30-year fixed-rate mortgage fell 17 basis points to 3.43%, the average rate on the15-year fixed-rate mortgage fell 21 basis points to 2.943% and the average rate on the 5/1 ARM dropped five basis points to 3.519% . . . A basis point is one one-hundredth of one percent. Rates are expressed as annual percentage rate, or APR. The 30-year fixed-rate mortgage is one basis point lower than a week ago and 90 basis points lower than a year ago.”
As of the date of this post, the rate for a 30-year fixed-rate mortgage is averaging right around 3.523%, which is uncommonly low, as you know. As a result, despite rising unemployment and economic uncertainty, many people are still applying for mortgages because the interest rates in Roseburg are so low. My opinion, this could be an once in a lifetime opportunity to grab low rates like this, but the window won’t stay open forever.
At the same time, though – and buyers need to take this into account – even though rates are super low, they are still fluctuating. The reasons for this include:
- Huge jumps in unemployment
- School and business closures
- Continuing increases in mortgage and refinance applications
- Reluctance among lenders to buy jumbo mortgages
The upshot of all this, the financial experts say, is that “[a]pplyingfor a mortgage these days requires persistence and patience because rates jump around, making it important to check lenders’ rates daily or even more than once a day. Applying for a mortgage also requires comparison shopping because of the variation in rates among lenders.”
Interest Rates in 2020 Going Forward for Roseburg Home Buyers
Welcome to the roller coaster ride of interest rates! True, interest rates are currently very low, nevertheless they are also unpredictable. So what lies ahead for Roseburg home buyers?
Possibly a yo-yo effect. I mentioned earlier, rates hit new lows, lenders became overwhelmed, and then lenders responded by raising mortgage rates (yo-yo). So the Fed took countermeasures. “In response, the Federal Reserve has employed quantitative easing, or QE, by injecting billions into the MBS market, to ensure that mortgage rates stay low. The Fed has written a blank check, promising to buy billions in agency MBS, which come from Ginnie Mae, Fannie Mae and Freddie Mac. Experts say this move will help put mortgage rates back into balance, helping to push them into the low 3 percent range during Q2.”
In addition, because the Federal Open Market Committee has implemented policies to “ensure the continuation of economic activity and market liquidity, mortgage rates are likely to reach new lows in the coming weeks and months.” Financial markets are suffering stress and the economic outlook remains uncertain, but, still, market watchers say, we should expect “rates on 30-year fixed-ratemortgage[s] to hover around 3 percent or fall lower” throughout the rest of 2020.
Now’s the Time to Buy
If you’re a potential home buyer in Roseburg? Most likely – awesome opportunity for home buyers.
The best thing you can do when considering buying or selling a home is ask for help, and that’s what we’re here to do.