Mortgage Rates Brought a “More Normal” Market in December—Are You Ready to Take Advantage?
Mortgage rates experienced a big drop in December of 2020, providing an opportunity for potential homebuyers to take advantage of the more normal market. After a tumultuous 2020, mortgage rates are finally starting to settle down. In December, the average rate for a 30-year fixed mortgage dropped to 2.74%, a full 0.4% lower than the previous month.
What Caused This Drop in Rates?
There are a few factors that led to this drop in rates. First, the Federal Reserve has kept interest rates low to encourage economic activity. This has resulted in lower mortgage rates across the board, making it more affordable for potential homeowners.
Second, the election results have provided some clarity to the market. With the uncertainty of the election behind us, investors have become more confident in the market. This has caused an influx of money into the mortgage market, which has led to lower rates.
Finally, the economic outlook has improved slightly. Despite the pandemic, the economy is slowly starting to recover, which has caused mortgage rates to drop.
What Does This Mean for Potential Homebuyers?
For potential homebuyers, this is great news. Lower mortgage rates mean that you can get a lower monthly payment and save money on interest over the life of the loan.
If you’re in the market for a home, now is the time to act. With rates expected to remain low for the foreseeable future, you can lock in a great rate on a mortgage now and benefit from it for years to come.
Even if you’re not in the market for a home, now is a great time to refinance your existing mortgage. Refinancing can help you save money on your monthly payments and get a better rate on your loan.
What Should You Do Now?
Now is the time to take advantage of the current mortgage rates. If you’re looking to buy or refinance a home, it’s important to do your research to find the best rate available.
It’s also important to speak to a lender or mortgage broker to get pre-qualified for a loan. This will give you an idea of how much you can borrow and what your monthly payments will be.
Finally, it’s important to compare different loan options to make sure you’re getting the best deal. Different lenders offer different rates and terms, so it’s important to shop around and compare offers before making a decision.
The Bottom Line
Mortgage rates dropped to a more normal level in December, providing an opportunity for potential homebuyers to take advantage of the market. If you’re in the market for a home, now is the time to act.
Do your research, speak to a lender or mortgage broker to get pre-qualified for a loan, and compare different loan options to make sure you’re getting the best deal. By taking advantage of the current market, you can save money on your mortgage and benefit from it for years to come.