Mortgage rates continue to plummet hitting their lowest since early 2018. After Memorial Day weekend, rates fell in response to trade war tensions and market volatility. There was an 8% rise in refinancing application activity while potential homebuyers have stayed put on purchasing activity. About 5.9 million borrowers can refinance their mortgages seeing rate drops up to 75 basis points saving close to $300 a month. This is the largest group eligible in almost 3 years.
The latest job report was released and showed results of only a 75,000 gain — a number much lower than the forecasted 185,000. Weaker number in employment creates urgency for the Feds to lessen rates, dropping some lower than 3 percent. The economy is still on the optimistic side, as the growth average is way over 150,000 in the last three months. Plus, unemployment rates had stayed steady at 3.6% with foreseeable decrease. Stronger economies equal more people able to support higher rates.
Currently, buyers have been very rate sensitive because of the high home value outpacing incomes, so falling rates are beneficial. Though home prices are decreasing slowly, affordability is at its best since over a year ago. The lower rates and saving on those monthly payments are making buyers more motivated to purchase.