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A Drop in Mortgage Rates for the Start of 2019

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Throughout much of 2018 many experts were speculating, as they do each year, how mortgage rates would change heading into 2019.  As we saw rates continue to slowly climb throughout 2018, it was natural that many industry professionals assumed the trend would continue into the new year.  However, it doesn’t appear those predictions are holding true, at least not for the first few weeks of 2019.

In an article published by the Washington Post, author Kathy Orton states, “Stock market volatility, global trade worries and the government shutdown are pushing rates down to their lowest levels since August.”.  Recently the 30 year fixed rate dropped to about 4.51.  In fact, Lending Tree released a report showing about 70% of home purchasers secured a rate below 5 percent. 

Some in the industry believe that rates may drop further.  Many are speculating the effects the government shut down, treasury yield rates, as well as jobs report data on mortgage rates.  Nevertheless, the current drop in mortgage rates coupled with slowed home price growth should entice home buyers to take action.

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Weak Economic Data Means Good News for Mortgage Rates

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MINOLTA DIGITAL CAMERAMortgage rates have retreated again in response to weak financial data and global economic concerns, according to a report released Thursday by the Federal Home Loan Mortgage Corp.   Specifically, the average 30 –year mortgage rate dropped to 3.6 percent.  In fact, mortgage rates have not been above 3.7 percent in the past 10 weeks.  This streak has allowed home buyers more time to take advantage of these historically low mortgage rates.  Consequently, loan application volume increased 9.3 percent from the previous week.

The drop in the mortgage rates is a direct result of a weak jobs report, which was released last Friday.    “Growing optimism about the state of the economy was quickly erased with May’s employment report,” Sean Becketti, Freddie Mac chief economist, said in a statement.  The article published in The Washington Post, by Kathy Orton, also details some of the global economic concerns which have had an effect on the direction of mortgage rates.

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