WSJ: “Average Rate on a 30-year, Fixed-Rate Mortgage was 3.75% Last Week, Down from 4.94% in November”

Sooner or later, industry mavens predicting higher mortgage rates will be right.

But not this year.

From a peak of almost 5% late last Fall, rates fell to 3.75% last week.

Count that the 4th (7th? 9th?) year in a row that the consensus expectation of higher rates has been confounded.

It sort of recalls the line about economists predicting 9 out of the last 5 recessions.

Winners & Losers

For Buyers, the drop in interest rates translates into a hefty increase in their purchasing power.

In turn, that suggests a tail wind for home prices later this Summer and Fall, benefiting Sellers as well.

The one potential fly in the ointment?

The reason for the drop in rates — namely, concerns about a slowing U.S. and especially global economy.

P.S.: One unalloyed beneficiary of lower rates: existing homeowners (and borrowers) who are now candidates to refinance their current mortgage.

See also, “The Federal Reserve’s Gift to Summer 2019 Home Buyers (Sellers, Too).”

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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