In the past couple months we have seen fixed interest rates slowly slip under 4%, back to levels we thought we wouldn’t see again. The market has moved the rates lower on a combination of factors. The Federal Reserve continues to keep their benchmark rate low to stimulate employment and the economy. Even with the economy showing signs of life, the inflation rate has remained well within Fed targets and given it more leeway to keep rates low at the moment. Geopolitical events have also driven investors into the safe haven of US Treasuries which keeps long term rates low.
We recently have been bouncing between 3.5% – 3.75% on conforming loans of $417,000. 15 Year Fixed is hovering right around 3%. Another great product is the 7/1 hybrid ARM where the rate is fixed for the first 7 years. These rates are as low as 3.125%, which is a considerable savings over a 7 year timeframe.
We don’t anticipate this trend in rates to last long as most economists feel the Fed will begin to tighten either in June or later in September. While we don’t anticipate rates running away, the days of sub 4% are probably only going to last a few more months. Now is the perfect time to make that purchase and lock in a low rate. Also, for those considering refinancing, now is the time. Give us a call for more information.