For the first time, according to records dating back to the 1950s, the average rate for a mortgage has dropped below 3.50%, hitting 3.49% last Thursday. Thatâ€™s the lowest mortgage rate recorded since long-term mortgages were introduced 60 years ago.
Spurred by low mortgages and gradually rising home prices, the National Association of Realtorsâ€™ Pending Home Sales Index was at 99.3 in June, nearly nine points more than last Juneâ€™s 90.7. What differentiates the Pending Home Sale Index from other trend trackers, like the Case-Shiller Index or monthly new home sales data, is that it points to future activity. By tracking home sales newly under contract, the Pending Home Sales Index offers a window into actual home sales a couple of months down the line, â€” with some degree of reliability. For example, on the average, 80% of open home sale contracts will close within 60 days.
With mortgage rates lower than theyâ€™ve ever been, many industry experts say now is the time to refinance. The economic recovery, though slow and sputtering, appears to be relatively steady compared to the last few years. The marketplace for loans has expanded far beyond local boundaries and homeowners are taking advantage of long-distance lenders offering better rates â€” and the record low rates speak loudly against homeowners taking an adjustable rate mortgage. Instead, experts advise making the most of the opportunity to lock in these low rates now, before more global economic upheaval turns the tides and the rates once again begin to rise.