Concerns over the COVID-19 omicron variant brought mortgage interest rates slightly higher this week, according to the latest data from Freddie Mac.
The 30-year fixed-rate mortgage increased to 3.11% annual percentage rate (APR) for the week ending Dec. 2, up slightly from 3.1% the week before, according to the latest Primary Mortgage Market Survey from Freddie Mac. This is down significantly from last year when the 30-year mortgage rate averaged 3.71%.
If you are interested in saving money on your monthly mortgage payment and over the life of the loan, you could consider refinancing to lower your interest rate. Visit Credible to find your personalized rate and see how much you could save without affecting your credit score.
Omicron variant concerns influencing interest rates
Aside from 30-year terms, rates for other loan lengths saw some movement as well. The average rate for a 15-year fixed-rate mortgage decreased from 2.42% last week to 2.39%. However, this is up from 2.26% at the same time last year. Additionally, the five-year Treasury-indexed adjustable-rate mortgage (ARM) increased to 2.49%, up from 2.47% last week but down from 2.86% last year.
The higher interest rates are, in part, due to concerns over the newly discovered omicron variant, as well as other factors.
“Investors balanced worries about the new omicron COVID variant with cues from the ADP private sector employment numbers which outpaced market expectations,” George Ratiu, Realtor.com manager of economic research, said. “Markets also took note of Federal Reserve Chairman Powell’s testimony in Congress which pointed to a potential faster pullback in asset purchases – including mortgage-backed securities – as a sign of continued economic improvement.”
If you want to take out a mortgage refinance to get a lower interest rate, visit Credible to compare multiple mortgage lenders at once and choose the one that has the best refinance rate for you.
Experts say now is still a good time to refinance
Despite the slight uptick in mortgage rates this week, Freddie Mac said now is still a good time for homeowners to refinance since today’s mortgage rates remain at historic lows.
“Mortgage rates continue to remain stable notwithstanding volatility in the financial markets,” Freddie Mac Chief Economist Sam Khater said. “The consistency of rates in the face of changes in the economy is primarily due to the evolution of the pandemic, which lingers and continues to pose uncertainty. This low mortgage rate environment offers favorable conditions for refinancing.”
These interest rate averages are based on conventional loans, but other loan types such as VA loans, FHA loans or jumbo loans typically have higher interest rates. But this week, the Federal Housing Finance Agency (FHFA) announced it was raising the conforming loan limit by nearly $100,000, allowing more homeowners and homebuyers to qualify for conventional financing. This could also help many lower their interest rates on their loans.
If you are interested in refinancing your mortgage to save on your monthly payment while current interest rates are low, contact Credible to speak to a home loan expert and get all of your questions answered.