We’ve been spoiled by ultra-low mortgage rates for the last several months. We saw 30-year mortgage rates go down into the mid twos on conventional and government loans. These interest rates were brought on by the pandemic, the job market uncertainty, and the broader United States being in a holding pattern about what’s going to happen with the broader economy. Doom and gloom throughout 2020 along with lack of consumer optimism help contribute to ultra-low mortgage rates. Adding in as to who would win the presidency which created further uncertainty in the markets helped drive rates lower. Fast forward to 2021, there is a new administration and ongoing talks about the new stimulus plan. This new stimulus is promoting concerns of inflation within the economy and as a result, both stocks and bonds are feeling the pain of an inflationary environment or rather a potentially inflationary environment. As such, mortgage-backed securities are deteriorating pushing mortgage rates higher. Here is how to handle the present situation with regards to mortgage rates.
It goes without saying interest rates are at extremely low levels. Those low-interest rates are fueling demand for housing. So, let’s say you’re pre-approved and you’re out looking for a house. You found a house and now it comes time to the negotiation- do I put an offer in or pass?
With interest rates still at historically low levels, many homeowners are discovering they can refinance to lower their interest rate, drop PMI, pull cash out, or move to an aggressive shorter-term mortgage than ever before due to global and economic events presently happening in the coronavirus pandemic.