Home Loan Hunters Flock To Some Of The Best Deals In History


Mortgage rates are already sliding to a new all-time low. The coronavirus, the spread of which is making investors around the world nervous, could accelerate that.

7-Feb-20 ?? Home loan hunters in Chicago and across the country are flocking to some of the best rate deals in history as interest costs continue to drop.

On February 6, Freddie Mac ?? s Primary Mortgage Market Survey reported that 30-year benchmark fixed loans averaged 3.45%, the lowest in three years. A week earlier, the popular rate averaged 3.51 percent. A year ago, lenders were charging 4.41% for 30-year fixed rate loans.

Meanwhile, 15-year mortgage rates averaged 2.97%, down from 3% a week earlier. A year ago, 15-year fixed rate loans averaged 3.84%.

On February 6, Chicago lenders cited a range of 3.3% to 3.481% on 30-year fixed mortgages, according to RateSeeker.

Mortgage rates hit an all-time low on Nov. 21, 2012, when the 30-year average fixed mortgage lending hit 3.31%, according to Freddie Mac records. This milestone could be exceeded in early 2020 if current trends continue.

On February 5, the Mortgage Bankers Association reported that mortgage applications increased 5% from the previous week to the highest level since May 2013.

The 10-year Treasury yield, a benchmark for investors in mortgage bonds, fell nearly 20 basis points in early February as economic concerns over the Chinese coronavirus continued to spread.

Apparently, the spread of the coronavirus is making investors around the world anxious, and when they get nervous they tend to sell stocks and seek the safe haven of US bonds. Increased competition for bonds means that investors, including those who buy mortgage-backed bonds, have to accept lower yields. This translates into lower mortgage interest rates.

The MBA also reported …

?? The refinancing index climbed 15% to its highest level since June 2013. Compared to the previous year, the index was 183% higher.

?? The refinancing share of the mortgage business rose to 64.5% of all mortgage applications, from 60.5% a week earlier.

Sam khater

?? As rates fell for the third week in a row, markets rebounded with increases in manufacturing and service sector activity, ?? Noted Sam khater (left), Freddie Mac’s chief economist. The combination of very low mortgage rates, a strong economy and a more positive sentiment in the financial markets all indicate that home purchase demand will continue to increase in the coming months.

History of mortgage rates

Over 20 years ago, in August 1999, when many today’s millennial borrowers were in high school, lenders were quoting 8.15% on a 30-year fixed mortgage, according to Freddie Mac.

However, to truly appreciate today’s historically low interest rates, housing experts say homebuyers need only look at what banks and mortgage lenders were charging more than three years ago. decades in the early 1980s.

According to Freddie Mac, benchmark 30-year mortgage rates peaked at 18.45 percent in October 1981 during the Great Recession of the 1980s. Rates fell below 10 percent in April 1986, then rebounded in a 9-10 percent range for the remainder of the 1980s.

Records from the former Federal Housing Finance Board show that long-term mortgage rates were relatively affordable five decades ago, at 5.81-5.94% between 1963 and 1965. In 1966 and 1967, borrowers were paying in average 6.3 to 6.4%.

Photo by Radu Bercan

In the 1960s, rates last fell below 6.5% in January 1968, when the national average reached 6.41%. Between 1971 and 1977, Illinois’ defunct Usury Act maintained rates between 7.6 and 9 percent.


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