Low mortgage rates are extending the traditional home buying season.
This late in the summer, the home buying season usually starts to wind down.
The kids are back in school. Vacation days are mostly gone. Home shoppers traditionally slow down.
But this year, the housing market is getting a double shot of espresso thanks to some of the lowest mortgage rates on record.
This week, nationwide home finance rates averaged 3.55% for 30-year loans — the lowest cost in three years.
The lowest long-term mortgage average Freddie Mac has ever recorded in its weekly nationwide survey was 3.41% in mid 2016.
With the cost of financing a home nearing historic low levels, homebuyers and refinancers are scrambling in the August heat to get deals done.
“The drop in mortgage rates continues to stimulate the real estate market and the economy,” Sam Khater, Freddie Mac’s chief economist, said in the new report. “Home purchase demand is up five percent from a year ago and has noticeably strengthened since the early summer months, while refinances surged to their highest share in three and a half years.
“Households that refinanced in the second quarter of 2019 will save an average of $1,700 a year, which is equivalent to about $140 each month,” he said. “The benefit of lower mortgage rates is not only shoring up home sales, but also providing support to homeowner balance sheets via higher monthly cash flow and steadily rising home equity.”
While the summer sale on mortgage money has knocked fence sitters into action and sent crowds to weekend open houses, there’s a likelihood the bargain mortgage rates will stick around for a while.
With the Federal Reserve being pressure to make more interest rate cuts during the rest of the year, there’s a good chance that home finance costs will remain attractive.
By Steve Brown
11:38 PM on Aug 22, 2019