For the last few years, Americans have enjoyed a relatively strong economy. Even though GDP growth has struggled to surpass 3%, wages and consumer spending have been on the rise. Currently, the average mortgage balance sits at $137,000, and mortgage rates are falling.
According to BankRate, as of Monday, February 25, the average rate for a 30-year, fixed-rate mortgage decreased Monday; the average rate on 5/1 adjustable-rate mortgages dipped, too. However, the average rate on 15-year fixed mortgages did increase slightly. The current average rate for 3-year fixed mortgages is 4.34%, which represents a decline of five points over the last seven days. As of January, 25, the rate was much higher — approximately 4.53%.
As the rate sits now, borrowers would have to pay $497.22 per month in principal and interest for every $100,000 that is borrowed. That is a decline of $2.95 from seven days ago. If you are unsure of how to find specific costs for your loans or payments, mortgage calculators are great for determining financial information and mortgage rates.
Here are some finical data points that are driving today’s mortgage rates:
- Yield on 10-year treasuries – The yield on 10-year treasuries increased to 2.67%, up from 2.66% on Friday. This uptick is bad for mortgage borrowers because the rates tend to follow treasuries.
- CNN Money’s projections – CNN Money’s Fear and Greed Index experienced significant uptick at the end of February. On a scale of 0 to 100, the Fear and Greed Index sat at 55. By Monday, it jumped up to 72. This increase is bad for borrowers because “greedy” investors push bond prices down and “fearful” investors do the opposite.
Whether or not the rates for mortgages are increasing, decreasing, or remaining stagnant, it’s recommended to do plenty of research and weigh potential options whenever you’re searching for a home or trying to acquire a loan.
“Potential buyers should never forget that they can often save money by shopping around before settling on a loan,” said Tendayi Kapfidze, Chief Economist at LendingTree. “Those who shopped around and were offered a choice between five different loans saw an average spread of 0.53%. These differences could translate to savings of thousands of dollars over the lifetime of a loan.”
If you want to learn more about mortgage calculators and banking loans, contact our professionals right away.