- Michala Costello
Mortgages Rates Drop observed this July 2022
Mortgage rates are down for the second week in a row. The average 30-year fixed-rate mortgage dropped to 5.30% for the week ending July 7, down 0.40 percentage points from last week, according to Freddie Mac's benchmark survey. (Source)
From Money.com article, these are the insights from this rate drop.
How are mortgage rates impacting home sales?
Overall, mortgage applications were lower for the week ending July 1. The total number of applications edged down by 5.4% from the previous week, according to the Mortgage Bankers Association.
"Rates are still significantly higher than they were a year ago, which is why applications for home purchases and refinances remain depressed," commented Joel Kan, associate vice president of economic and industry forecasting for the MBA. "Purchase activity is hamstrung by ongoing affordability challenges and low inventory, and homeowners still have reduced incentive to apply for a refinance."
Purchase applications decreased by a seasonally adjusted 4% from the previous week and 17% lower than the same week last year.
There were 8% fewer refinance applications compared to the week before and 78% lower year-over-year.
Should I lock in my mortgage rate today?
Locking in a rate as soon as you have an accepted offer on a house (and find a rate you’re comfortable with) can help guarantee a competitive rate and affordable monthly payments on your home mortgage. A rate lock means that your lender will guarantee you an agreed-upon rate for typically 45 to 60 days, regardless of what happens with average rates. Locking in a competitive rate can protect the borrower from rising interest rates before closing on the mortgage
It may be tempting to wait to see if interest rates will drop lower before getting a mortgage rate lock, but this may not be necessary. Ask your lender about “float-down” options, which allow you to snag a lower rate if the market changes during your lock period. These usually cost a few hundred dollars.
If you are in limbo, whether you think that now is the best time to buy a house or sell the ones you have, you can always send us a message and we'd be happy to assist you in the best way we can. We have trusted mortgage lenders who would be happy to talk in more detail with you about what the best options for you would be!