They are now at their lowest levels in years, with average 30 year interest rates dipping below 3.60%. They have dropped by around a quarter point in just five weeks.
One of the main factors in this incredibly good news for home buyers and, by implication, sellers too, was last week's British vote to exit the European Union - the so called Brexit.
Largely unexpected, Brexit has caused a tidal wave of uncertainty in global financial markets. Although Britain has yet to begin formal proceedings to leave the EU, and when it does the process will take years, investors immediately reacted extremely negatively to an unprecedented situation, whereby the future of the world's fifth largest economy is now highly unpredictable.
Any aversion to risk inevitably results in a retreat by investors into safe havens, such as bonds. This typically has the welcome side effect of keeping mortgage rates low.
However, once the dust began to settle after the news arrived late on June 23rd, stock markets staged something of a recovery during this week. Interestingly, however, home loan interest continued on its journey south. Enthusiasm for bond buying has continued, due to the likelihood of loose monetary policies by global central banks in cautious response to the Brexit decision.
In the US, for example, there has been speculation that the Federal Reserve will now wait longer before raising the federal funds rate of interest. Although this doesn't directly affect mortgage rates, it's still superb news for the real estate market, in that people's outgoings won't be increasing due to higher credit card interest, for example, hence those all important debt to income ratios are unlikely to be adversely affected for the time being.
Yet again this year, we are seeing how global affairs can directly, and often positively, affect your chances of securing affordable home finance. For further reading on the possible effects of Brexit on home loans, please click here to read a very interesting Washington Post article of earlier this week entitled: "How Brexit could push mortgage rates to historic lows".
As the title of this blog suggests, we think that buyers should seize this moment to lock in a fantastically low rate of interest for the life of their home loan. Indeed the same advice also applies to sellers, who should already be capitalizing on the stunning levels of buyer sentiment in the Albuquerque area at the moment.
Situations can change fast so why wait? We will very likely look back on this year as maybe one of the best ever opportunities to buy or sell real estate.
Don't waste another second and contact us right now to get started.