This week brought excellent news for the mortgage market. Mortgage rates dropped by 0.25% to 0.375% across the board, thanks to a favorable Consumer Price Index (CPI) report and additional economic news pointing towards lower inflation. Inflation is a key driver of mortgage rates; as inflation decreases, mortgage rates tend to follow.
Understanding the Drop in Rates
The CPI report is a crucial indicator of inflation, measuring the average change over time in the prices paid by urban consumers for a market basket of goods and services. This week’s report showed a more significant drop in inflation than expected, which has a direct impact on mortgage rates. Lower inflation means that the purchasing power of money is preserved, reducing the need for lenders to charge higher interest rates to offset the eroding value of money over time. In addition to the CPI report, other economic news pointed towards a broader trend of decreasing inflation. This included reports on consumer spending, wage growth, and other economic indicators that all suggested a slowing down of inflationary pressures. When these reports align to show a consistent trend, it provides a strong signal to the market that inflation is under control, leading to lower interest rates.
Impact on Borrowers
This drop in rates is fantastic news for both homebuyers and those considering refinancing. Lower mortgage rates mean that borrowing costs are reduced, making it cheaper to finance a home purchase or to refinance an existing mortgage. For homebuyers, this can translate to lower monthly payments, allowing them to afford more house for the same monthly budget. For those refinancing, it can mean significant savings over the life of the loan, reducing the total amount of interest paid. To put it in perspective, with rates now at three-month lows, many borrowers will find more favorable terms than they have seen in recent months. This is a unique opportunity for those who have been on the fence about buying a home or refinancing their mortgage to take advantage of these lower rates.
Looking Ahead to Next Week
As we look forward to next week, we don’t expect any major changes in mortgage rates. Current economic indicators suggest that the trend of lower inflation will continue, keeping mortgage rates at their current low levels. However, it’s always important to stay informed about potential developments. Economic data can be unpredictable, and rates can change rapidly based on new information. We’ll continue to monitor the situation closely and provide updates as they come. For now, the outlook is positive, with stable and low mortgage rates expected to persist. This week has been highly favorable for the mortgage market, with a notable drop in rates following positive economic news. This provides a great opportunity for homebuyers and those considering refinancing to secure lower borrowing costs. Stay tuned for next week’s update, and take advantage of these favorable conditions while they last!
| Product | Rate | Last Week | Change |
| 30-year fixed | 6.24% | 6.624% | ⇩ 0.384 |
| 15-year fixed | 5.374% | 5.89% | ⇩ 0.516 |
| 30-year fixed with $1,500 lender credit | 6.624% | 6.99% | ⇩ 0.366 |
| 30-year FHA with $1,500 lender credit | 6.124% | 6.24% | ⇩ 0.116 |
| 30-year FHA | 5.74% | 5.99% | ⇩ 0.25 |
| 30-year VA | 5.74% | 5.99% | ⇩ 0.25 |
DISCLAIMER: ALL LOANS ARE SUBJECT TO CREDIT APPROVAL. INTEREST RATES ARE SUBJECT TO CHANGE DAILY AND WITHOUT NOTICE. CURRENT INTEREST RATES SHOWN ARE INDICATIVE OF MARKET CONDITIONS AND INDIVIDUAL QUALIFICATIONS AND WILL VARY UPON YOUR LOCK-IN PERIOD, LOAN TYPE, CREDIT SCORE, LOAN TO VALUE, PURPOSE, AND LENDING SOURCE.
DISCLAIMER: FOR NEW JERSEY PURPOSES, WE ARE NOT A LENDER AND CANNOT GUARANTEE THESE INTEREST RATES.
30-year fixed-rate mortgages
Presently, the 30-year fixed-rate mortgage sits at 6.24%, reflecting a decrease of 38.4 basis points from the preceding week. Despite its interest rate being higher than that of the 15-year mortgage, the 30-year option is favored by many buyers for its advantage of providing more budget-friendly monthly payments.
15-year fixed-rate mortgages
The current interest rate for a 15-year fixed-rate mortgage is 5.374%, showcasing a drop of 51.6 basis points from the week prior. Choosing a 15-year mortgage enables borrowers to pay back their loan repayment quicker compared to the 30-year option. While this leads to increased monthly payments, it substantially diminishes the total interest paid over the loan’s duration.
30-year fixed-rate with a $1,500 lender credit
A 30-year fixed-rate mortgage with a $1,500 lender credit offers borrowers the stability of a fixed interest rate over a long loan term, along with financial assistance from the lender to offset some of the upfront costs associated with obtaining the mortgage. The current interest rate stands at 6.624%, 36.6 basis points lower than last week.
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