Mortgage Rates Remain Low

For 10 out of the last 11 weeks, mortgage rates have remained in the low four-percent territory.

The national average 30-year fixed rate rose just 1 basis point (0.01%) to last Thursday, says Freddie Mac.

You wouldn’t think rates would be this low.

The stock market just crested 26,000 for the first time in history. Companies are reporting healthy earnings.

Typically, rates rise in such an environment. But they just won’t budge. It’s a golden opportunity for mortgage shoppers to secure an affordable payment while rates are still low.

It’s All About Inflation

Mortgage rates remain calm when inflation is low.

Inflation eats into profits from the assets that back mortgages. In other words, investors lose money when they hold a low-interest note while inflation climbs.

Fortunately, inflation is coming in at low levels, according to a release from the U.S. Bureau of Economic Analysis. The report tracks what consumers are spending on everyday items like food, housing, and utilities.

The core personal consumption expenditures index, or “core PCE”, strips out volatile food and energy costs. This index is important because the Federal Reserve uses it to decide on monetary policy.

The Federal Reserve wants inflation to ring in at about 2% annually — but it hasn’t seen anything close to that rate since early in 2017. Since then, inflation has dropped again.

This means the Fed might be slower to raise rates, plus investors’ cash will remain intact if they continue to invest in mortgage-backed securities.

Both these factors are leading to the low rates we see today.

Low inflation isn’t the only factor when it comes to mortgage rates, but it’s a big one. As a mortgage consumer, it pays to know where inflation is headed.

How Does Freddie Mac Find Its Average Rate?

If you’ve applied for a mortgage recently, you may have noticed that you didn’t receive a rate that was anywhere close to Freddie Mac’s average rate.

That’s to be expected.

The agency polls 125 lenders each week, asking them their “perfect” rate for 30- and 15-year fixed loans, plus 5-year ARMs. The lenders’ rates assume a high credit score, decent down payment, and points paid.

The typical applicant often doesn’t qualify for a rate that low.

Plus, the agency asks about conventional loan rates only. You will get a very different (often lower) rate if you apply for an FHA loan or VA financing.

Despite the issues, though, the agency’s survey is a good gauge of the long-term direction of rates.

Looking to lock a rate? Don’t worry that you might not get the one Freddie Mac publishes. All rates are low right now, and you’re likely going to get a mortgage rate that is lower than most applicants have received during any other time in history.

What Are Today’s Mortgage Rates?

Thirty-year mortgages have averaged more than 8% over the past 45 years. They are at pretty much half of that now. Please see our links below to get pre-approved and receive an interest rate quote.

Posted by: Carlson Mortgage – a top-rated St. Louis mortgage broker providing home loans in the state of Missouri. We are routinely ranked as a #1 mortgage broker in Missouri on Yelp, Google and Zillow. We can be reached at (314) 329-7314 seven days a week.

Our loan application can be found here or you can call us at 314-329-7314 to speak with one of our mortgage loan officers. Also, here is our pre-approval page, if you are looking to buy a home or need a referral to a top real estate agent.

Let us be your source for some of the lowest mortgage interest rates in St. Louis on first-time home buyer, conventional, FHA, Veterans (VA), Jumbo and condominium (condo) financing. Since 2004, we’ve been providing home loans and mortgage services in St. Louis that are tailored individually to your unique needs and to your financial situation. Our loan officers speak English, Spanish and Russian. Call us today to inquire about home loan interest rates, to get pre-approved for a purchase or a refinance mortgage, or if you have any general mortgage lending questions.