Diana Olick reported yesterday at CNBC Online that, “Fall homebuyers are getting a bonus. The sell-off in the stock market is causing an unexpected turnaround in mortgage rates.
“Mortgage rates fell throughout much of the summer but then made a sharp jump higher in September. Now rates are headed back down, along with the Dow Jones Industrial Average, which fell more than 800 points total on Tuesday and Wednesday, the two first days of October.
“The average rate on the popular 30-year fixed mortgage was at 3.75% last Friday. By Thursday, it had dropped to 3.62%, according to Mortgage News Daily. This is an average for borrowers with solid credit scores and at least a 20% down payment.”
The CNBC update noted that, “More dramatic is the comparison with a year ago. Rates are now about 1.25 percentage point lower than they were at this time last year. For the average borrower taking out a $300,000 mortgage, that is a savings of about $225 on the monthly payment, or $2,700 per year. That is big savings for borrowers refinancing their loans, and it gives buyers significantly more purchasing power in an already pricey housing market.
“Lower rates are already boosting sales for the nation’s homebuilders. Lennar posted higher-than-expected new orders in the third quarter as interest rates dropped.”
