As a licensed loan originator I watch and monitor the mortgage market on a daily basis and what I’ve seen lately continues to surprise me. Mortgage rates have for the past several weeks hovered right around 3 year low marks and the best I’ve seen since 2013. I have put out quotes to borrowers on both purchases and refinances that are at some of the lowest interest rates I’ve ever been able to offer borrowers. You may ask what’s been driving rates to these low figures?


That’s an interesting question as the stock market continues to do quite well and typically a stock market that’s performing well results in higher interest rates for mortgages as those are needed to attract investors to their bonds.


What is keeping interest rates low right now is that the global economy has been underperforming lately and the safety of U.S. Treasury Bonds is attractive to international investors. On top of that, fears regarding the corona virus and its impact on Asia and the global economy are adding even more push down to interest rates right now.


The low yields on mortgage bonds have allowed us to quote interest rates near all time low figures. Yet despite the negative economic elements that have allowed that, the rates haven’t gone below the seminal 3% mark on 30 year fixed conventional loans which is a huge break point. Now the question you may be asking is how long will rates stay this way and do they have potential to go even lower?


The more positive U.S. economic data comes out including rising wages, a good job market and high consumer confidence the more likely it is that rates will go up. If global markets start to see improvement from the central bank stimulus then we may have hit the bottom on interest rates. However if the corona virus escalates, particularly in the U.S., or we have some other major unexpected economic event then we could see them move lower.


Here’s my opinion – the U.S. economy is doing well and rates are near historic lows at the moment. If you are in a purchase transaction now I’d be encouraging you to lock right away. If you are thinking about refinancing, now would be a great time to take advantage of what is likely to be some of the lowest rates historically available. This may be as good as things get for awhile so that makes it a great time to be getting a new mortgage with the rates you'd have access to.