When people look back on the tumultuous 2020 economic landscape, they might pause a moment to study home mortgage rates. Over the last three months, these rates have managed to achieve five (!) all-time lows. Currently, Freddie Mac, a home loan mortgage corporation that buys mortgages from banks, reports an average 3.03% rate on 30-year fixed-rate mortgages, and there is a chance that we could see rates below 3% between now and the end of August.
You can see the remarkable downward trend in mortgages from late 2018 through the end of June this year, and then the light-blue-shaded part of the chart shows projected rates going forward. Compare these rates to 18% fixed-rates back in the early 1980s, or 5% as recently as 18 months ago. You can take the projections with a grain of salt (nobody knows what will happen next week or next month, much less out to the end of the year), but it’s pretty clear that today’s 3% rate is pretty extraordinary.
Does that mean that most people should be refinancing their home loans? That depends on a number of factors, including their current mortgage rate and how long they expect to own their house. But it may be worth exploring, sooner rather than later.