East Bay Mortgage Rates Drop Again, According to Survey

East Bay mortgage rates haven’t been this low since 2013. According to a recent report from Freddie Mac, the average rate for a 30-year fixed home loan dropped to 3.41% for the week ending July 7, 2016.

The latest results from Freddie Mac’s weekly mortgage-rate survey were published earlier today, bringing good news for home loan shoppers across the East Bay. According to the survey, the 30-year average rate fell to 3.41%. That was a decline of seven basis points (0.07%) from last week’s average of 3.48%. Mortgage rates haven’t been this low since May 2013, when the average fell below 3.4%.

Freddie Mac: Brexit Has Driven Rates Downward

The so-called “Brexit” fiasco (Britain’s exit from the European Union) has played a role in the downward trend in lending rates. Last month, Britain voted to leave the E.U., and this announcement shook financial markets due to the economic uncertainty it brings.

According to the Freddie Mac news release that accompanied the latest rate survey:

“Continuing fallout from the Brexit vote drove Treasury yields lower again this week. The 30-year fixed-rate mortgage followed Treasury yields, falling 7 basis points to 3.41 percent in this week’s survey. Mortgage rates have now dropped 15 basis points over the past two weeks, leaving them only 10 basis points above the all-time low.”

So in a sense, what’s bad news for the financial markets is good news for East Bay mortgage shoppers and home buyers. Interest rates are lower now than they’ve been in years, which could bring significant savings for those in the market for a refinance or purchase loan.

MBA Reports a Surge in Refinance Activity

And speaking of refinancing, refinance loan applications shot up recently in response to the nationwide rate declines. According to the Mortgage Bankers Association (MBA), refinancing application volume increased by 21% during the week ending on July 1, reaching its highest level since January 2015.

“Interest rates continued to drop last week as markets assessed the impact of Brexit,” said Mike Fratantoni, MBA’s Chief Economist.  “In response, refinance application volume jumped almost 21 percent last week to its highest level since January 2015.”

Apparently, homeowners are rushing to take advantage of the current low rates — and rightfully so. When you secure a low rate on a long-term mortgage loan, the savings can really add up over time (compared to a borrower with a similar loan at a higher rate).

East Bay & U.S. Mortgage Rate Trends for 2016

On average, East Bay mortgage rates have been hovering below 4% all year. At the beginning of 2016, the average rate for a 30-year home loan was 3.97%, according to the aforementioned Freddie Mac survey. It has been trending downward since them.

The chart below, courtesy of Freddie Mac, shows the recent downward trend in mortgage rates.

The blue line in this chart represents the average rate for a 30-year fixed mortgage. The far right side of the chart is where we are now, in July 2016. As you can see, the average has trended downward since the start of this year (middle of the chart). The same goes for the 15-year fixed mortgage (shown in green) and the 5/1 ARM loan (shown in orange).

The bottom line: If you’re in the market to buy a home, and you’ve been waiting to get the best possible deal, this might be a good time to lock in. East Bay mortgage rates are very appealing right now, and lower than they’ve been in years. But nobody can predict how long they’ll stay that way.

Disclaimers: This information was provided for informational purposes only. The mortgage rates shown above are averages based on Freddie Mac’s survey of the primary mortgage market, which compiles input from about 125 lenders nationwide. The rate you receive on a home loan could vary from those shown above, based on a variety of factors including your credit history. Please contact us if you would like to get a rate quote for a loan.