At the end of August, we posted about decreasing mortgage rates. As of August 31st, the average 30-year fixed conventional mortgage rate had dropped to 6.52%. That was the lowest point of the year. Now, mortgage rates have dropped yet again.
As of Monday, September 8th, the 30-year fixed conventional mortgage rate decreased to 6.28%. As of the day of this writing, September 17th, they have fallen even further to 6.24%.
For comparison, the high this year was in January, when mortgage rates reached 7.26%.
Why are Mortgage Rates Dropping?
The decreases in mortgage rates are tied to the poor performance of the job market. The jobs report for August showed an unemployment rate of 4.3%. That is a .1% increase from July. Only 22,000 jobs were added during the month of August. That shows that the labor market is slowing.
The poor performance of the job market reflects a broad range of factors, including recession anxieties, the impact of the tariffs, and general instability. In response to these factors, companies are holding off hiring where they can. Many companies are also embracing off-shoring and automation, rather than opening jobs for American workers.
Consumers are continuing to face rising inflation as well. As a result, many are spending less, which is reducing business revenue. This, too, is contributing to reductions in hiring.
When the job market is ailing, cutting interest rates is one of the ways that the federal government often responds to try and balance things out. If the trends with the employment market continue, more rate cuts could be possible in the future.
What Lower Mortgage Rates Mean for Homebuyers and Homeowners
Reduced mortgage rates offer benefits for both homebuyers and homeowners.
If you are a homebuyer …
- You can lock in a low fixed mortgage rate for the duration of your mortgage. With a fixed rate mortgage, no matter what rates do in the future, you will always be paying today’s low mortgage rate.
- With an adjustable rate mortgage, you can lock in an extra low rate during the introductory period. ARMs are ideal for homebuyers who plan to stay in their homes for just a few years.
- For many homebuyers, being able to lock in a low mortgage rate means being able to afford more home. You might be able to buy a larger or more luxurious home than you could with a higher rate. In some cases, it can make the difference between being able to afford a home or not.
If you are a homeowner …
- You can refinance to today’s low mortgage rate if you are currently paying a higher mortgage rate. When you refinance to a lower rate, your monthly payments go down, making it easier to keep up with your bills. You can also take advantage of the opportunity to consolidate high interest debts when you refinance, saving you even more money.
Both current and future homeowners may discover that they are able to pay off a mortgage more rapidly with a lower interest rate. The money you save on interest could be put toward making additional payments.
The money you save on interest with a lower rate can also add up to thousands of dollars over the lifetime of the loan.
Lock in Today’s Low Mortgage Rates
McGowan Mortgages can help you buy a home or refinance in Missouri or 40 other states. To lock in today’s low mortgage rates, please give us a call at (816) 631-9687. During your consultation, we can help you calculate how much you could save with a refinance, or we can connect you with a competitive mortgage for home purchase.
Do you know how much home you can afford?
Most people don’t... Find out in 10 minutes.
Today's Mortgage Rates
