For the second week in a row, as of February 20, 2020, mortgage rates have slightly increased. However, mortgage rates are still at historic lows so there is no reason to be alarmed.
The 30-year fixed-rate mortgage (“FRM”) increased by .02% from 3.47% to 3.49%. To put this in perspective, on February 20, 2019 the 30-year FRM sat at 4.35%. While the last two weeks represented an increase of roughly .05%, this is a drop in the bucket in the grand scheme of things.
Similarly, the 15-year FRM increased by .02% from 3.23% to 3.25%. The historically low FRMs have kicked off a surge of applications to refinance homes, and likely signals an early start to home-buying season. Ultimately, lower rates reduce the cost of a loan over its lifetime, and savvy investors realize now is the time to take on those loans (that’s basically the idea behind setting rates in the first place).
Interestingly, this phenomenon has emboldened home builders as well. Armed with the knowledge that there is a desire and ability to purchase new homes, builders have sufficient security to make the investment in developing new properties; something that is necessary in California’s inventory-starved market.
At the Chernov Team we understand that knowledge is power, and knowledge of how the market is behaving is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.