It’s been nearly a month since news of the EU Referendum decision began to rock global headlines. Along with its impending departure from the European Union, the UK will also forfeit the trade and investment opportunities presented by its previous access to the EU’s open markets. This is expected to shake up not only the economic climate across the pond, but also across the globe, including here in the United States. In the weeks since the landmark vote, one distinct effect rippling across the U.S. market is a historically low mortgage rate average.
According to Freddie Mac’s recent survey of nationwide lenders, current mortgage rates are hovering near November 2012’s all-time low of 3.31 percent and are projected to remain low throughout the summer. While the survey results regularly fluctuate based on weekly updates, mortgage rates have trended toward the lower end of the spectrum since the mid-June Brexit vote. As of July 14, the 30-year fixed-rate mortgage rate average hovered at 3.42 percent. For comparison, the average rate at this time last year was 4.09 percent. Meanwhile, 15-year mortgage rates are averaging 2.72 percent, and adjustable five-year mortgages are averaging 2.76 percent.
But why on Earth are UK politics affecting Americans’ home financing market? According to a recent Associated Press report:
“After Britain’s recent vote to leave the European Union, investors fled to the safety of U.S. Treasury bonds, driving up their prices and lowering their yields. Long-term mortgage rates tend to track the yield on 10-year Treasury notes, which jumped to 1.47 percent Wednesday from 1.37 percent a week earlier. It rose further to 1.52 percent Thursday morning — still far below its 1.75 percent before the British vote.”
In other words, while low mortgage rates are only one factor in the homebuying process, the current market is chock-full of them. If you are ready to take advantage of low rates, Seattle Mortgage Planners can help you make sense of the best options. Contact us today to start a partnership with our experts and receive a quote.