Since the results of the Presidential Election, average mortgage rates have been on the rise, worrying many in the housing market. The nine-week streak came to an abrupt end, however, with rates taking a tumble during the first week of 2017.
It's good news for people seeking a mortgage, with the average mortgage rate for a 30-year fixed-rate mortgage dropping by 12 basis points to 4.20 percent. Rates for a 15-year fixed-rate mortgage followed a similar trend, falling from 3.55 to 3.44 percent. Freddie Mac noted in its latest release that the drop was a sign the increases over the past couple of months have been "taking a toll" on the housing market. Both rates are still low compared to historic figures and may offer some short-term relief for borrowers ready to snap up an immediate deal.
Taking action now is important because most experts expect rates to continue climbing throughout the year, despite the recent drop. For example, the Treasury-indexed 5-year hybrid adjustable-rate home loan rose by three basis points, to 3.33 percent.
Compared with rates in previous decades, current financing options remain cheap for mortgage borrowers. This is set to change, though, with rates having the potential for a rise of 5 percent and above during the coming year. It means that homebuyers, particularly those trying to get on the housing ladder for the first time, should attempt to take action sooner rather than later, or face increased costs in the future as a result.
If you are interested in refinancing your home loan, visit the MoneyTips Mortgage Planner.
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