There’s been lots of talk about mortgage rates increasing. Since last summer, we’ve been in what’s known as a “rising-rate environment.”
But over the last several weeks, something changed. Rates have been falling and are now lower than they were when the rising rate environment was first declared. In fact, last week, mortgage rates fell at their fastest rate since 2009 following a meeting of the Federal Reserve Board.
So what does this mean for borrowers, especially veteran borrowers?
The good news
Mortgage rates are dropping at their fastest pace in a decade. Just as the spring homebuying season kicks off, the U.S. Federal Reserve announced it would not increase mortgage rates this year.
The benchmark 30-year fixed-rate mortgage fell this week to 4.17 percent from 4.44 percent, according to Bankrate’s weekly survey of large lenders. A year ago, it was 4.54 percent. Four weeks ago, the rate was 4.54 percent. The 30-year fixed-rate average for this week is 0.93 percentage points below the 52-week high of 5.10 percent, and is identical to the 52-week low of 4.17 percent.
The bad news
The decline in interest rates is largely attributable to a slowing global economy.
“Worries about slowing economic growth — both domestically and abroad — and the inversion of the Treasury yield curve put investors into semi-panic, bringing bond yields still lower after the Fed indicated no more rate hikes in 2019,” says Greg McBride, CFA, Bankrate’s chief financial analyst.
What lower rates mean for veterans
Lower interest rates are great for veteran borrowers who are looking to buy a home with no money down. At today’s rates, veterans can expect to pay $487.27 per month for every $100,000 borrowed, which is significantly less than the $544 per $100,000 we saw last year.
For more information on purchasing or refinancing a home while mortgage rates are down, contact us today.