Brexit Vote Drives Down Mortgage Rates

Last December low mortgage rates seemed a thing of the past following the the Federal Reserve's rate hike. But home loan rates didn't increase and, in fact they've sank to near-record lows as the global economy goes up and down as world events unfold. Now low rates appear here to stay.  According to the most recent Primary Mortgage Market Survey, the 30-year fixed-rate mortgage fell to 3.41 percent which is just slightly above the all-time record low.

One influencing factor has been the 'Brexit' vote in the U.K., which played a major role in driving down mortgage rates, according to Freddie Mac’s recently released monthly Outlook for July.

“With the U.K.’s decision to exit from the European Union, global risks increased substantially, leading us to revise our views for the remainder of 2016 and all of 2017,” says Sean Becketti, chief economist at Freddie Mac. “Nonetheless, the turbulence abroad should continue to create demand for U.S. Treasuries and keep mortgage rates near historic lows; thereby, allowing home sales to have their best year in a decade, along with a boost in refinance activity.”

Based on these low mortgage rates, expect the refinance share of originations to rise to 49 percent for 2016, 8 percentage points above last month’s forecast. This translates to about $100 billion more in originations, bringing the total for 2016 to $1,825 billion.

With June’s much-improved employment report over May’s release, expect unemployment to average 4.9 percent in 2016 and 4.8 percent in 2017. The house price appreciation forecast for 2016 remains at 5.0 percent, and in 2017, 4.0 percent. If you or someone you know is considering a move, please give us a call today. We can help you navigate the home buying and selling process!

Melissa Dierks                                                                    
The Regal Team of RE/MAX Professionals       
7111 W Bell Road, Suite 101
Glendale, AZ 85308
(623) 229-0154

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