For the past weeks Freddie Mac has continued to report that the average 30-year fixed mortgage rates have dropped to record lows.  Today’s good news, they are currently reporting at below 3%. Last week’s rate reached the lowest point in the history of the survey, which dates back to 1971 (See graph below):

What does this low mortgage rates mean for buyers?

This is huge for homebuyers. As a buyer it means home affordability  has greatly increased. This is what happens when you are faced with historically low mortgage rates.  Even in today’s sellers market, the buyer still wins. As inventory depletes and homes fly off the market, buyers are forced into countless bidding wars across the nation.  

In addition, move.com notes:

“Summer home buying season is off to a roaring start. As buyers flooded into the market, realtor.com® monthly traffic hit an all-time high of 86 million unique users in June 2020, breaking May’s record of 85 million unique users. Realtor.com® daily traffic also hit its highest level ever of 7 million unique users on June 25, signaling that despite the global pandemic buyers are ready to make a purchase.”

Clearly, buyers should capitalizing on today’s low rates. The chart below shows the average monthly mortgage payment decreases significantly when mortgage rates are as low as they are today.

A lower monthly payment means savings that can add up significantly over the life of a home loan. It also means that qualified buyers may be able to purchase more home for their money. Creating an increased desire to get in on today’s marketing option. Considering the amount of time families are now spending at home given today’s health crisis this has a huge appeal.

Many buyers are still thinking it’s best to wait until the market stabilizes and is a buyers market.  Home prices are not showing signs of dropping. Buyers that are still waiting for these drops, will loose in the long run of your loan.  Let’s say in your bidding war, you bid 10k over asking for your home. In most cases, you will save well over 10k throughout the lifetime of your loan with even a .5% rate drop. If you are considering buying, be prepared for a bidding war, but also know that you still come out with financial gains. A PCM loan officer can detail what your mortgage rates and monthly payment options would be.  We pride ourselves in being able to educate people on understanding their loan options, especially during this historical time. 

What does this market offer sellers?

The desire to be a homeowner continues to boom as the crisis moves on.  As states reopening phases shuffle back n forth, the desire for homeownership is rapidly growing. However, homeowners just aren’t as eager to sell as they have been in previous spring/summer months.  This season is generally the prime time for realty selling, making this year no different.  Low inventory is providing homeowners with the opportunity to have their properties under contract in less than a day in some cases.  There are very few properties lingering around in the market for more than 30-45 days. The average time it takes to process a loan. 

If you have an investment property, a rent house, or you are looking to move up to a bigger more spacious house and you have a single-family, average priced home or condo, you should have little to no issues in your home flying off the market. Any educated realtor can evaluate your home, provide you with comps and give you a fair estimate on how quickly your home may be under contract in this competitive market. 

Final Thoughts 

If you’re in a position to buy a home this year, initiate your mortgage transaction while mortgage rates are low. People’s Choice Mortgage works with over 80+ lenders and we understand the ins and outs of working in a red-hot market.  We also have access to find you a loan that works for you and your situation. We know in a competitive market, there will be times we need to move fast for closing. Our loan officers also understand it can take time to make the most educated loan choice for you.  If you want to have a real grasp on what mortgage rate you qualify for, reach out and talk with our loan officers today.  This is the best way to discover your options and also get information about how today’s market is a good market for you.