Mortgage rates bumped up a bit this week, but still remain at historically low levels.
So low, in fact, that any potential homebuyer might be certifiable not to lock in a low rate right now.
Of course, there’s always the argument that rates could go even lower, so it’s perfectly OK for homebuyers to wait for better rates to come along. That’s not so far-fetched, when you consider the conga line of bad news that has come dancing down Wall Street in recent weeks (i.e. Greek debt, the Gulf of Mexico oil spill, North Korea & Israel-Arab saber-rattling, high unemployment numbers).
But in reality, how much lower can mortgage rates really go? Thirty-year fixed-rate mortgages, even with an uptick last week, still are at 4.95%, according to the BankingMyWay Weekly Mortgage Rate Tracker.
Even if the lousy economic karma continues, rates can’t go much lower. That’s why it’s a risky move to wait for mortgage rates to go lower — or even stay where they are right now. While the risk-taker waits for interest rates to slide another few percentage points, the reality is that mortgage rates can rise quickly, resulting in a quarter-point rise in mortgage rates in a week or two while you’re distracted living your life. (A tip: Many banks and lenders regularly post their mortgage rates on Twitter. Sign up and keep yourself in the loop so you don’t miss a big ramp-up in mortgage rates.)
One reason why mortgage rates may stay low throughout the summer is the European debt debacle. We won’t get into the gritty details, but with so much anxiety over sovereign debt issues in key bourses like Greece, Portugal, Italy, Ireland and Spain, billions of dollars in investment money is flowing from Europe and into the U.S. these days.
With extra cash flowing through the investment pipeline here in the U.S., money becomes cheaper, as banks and lenders don’t have to raise interest rates to attract new investment money. Why do that when all that cash from Europe has fallen in your lap?
The Europe picture, coupled with the latest Standard & Poor’s/Case-Schiller Housing Index, which shows that U.S. home prices are once again in decline, should set the table for lower mortgage rates, but there’s no telling how long that will last.
So, if you’re in the market for a new home, and have good credit (700 and higher) you might want to pull the trigger sooner rather than later.
For the week following Memorial Day, the BankingMyWay Weekly Mortgage Rate Tracker took an upward slant:
Description This Week Last Week
One-Year ARM 4.002% 3.942%
Three-Year ARM 4.72% 4.157%
Five-Year ARM 4.062% 3.898%
15-Year Mortgage 4.599% 4.355%
30-Year Mortgage 4.95% 4.943%
As always, get the lowest rates possible via BankingMyWay’s Mortgage Rate Search. Week-to-week, it’s your best bet for finding the best mortgage rate deal possible.
—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.