After much speculation, the results are in. According to Freddie Mac’s monthly outlook for July, slow growth in China coupled with the Brexit vote have definitely driven down mortgage rates. In the latest survey, the 30-year fixed-rate mortgage fell to 3.41 percent, only slightly above the record low.
What does this mean? Well you can expect a flurry of housing activity, particularly in the refinancing sector, as homeowners around the nation capitalize on the historically low rate.
“With the UKs decision to exit the European Union, global risks increased substantially, leading us to revise our views for the remainder of 2016 and 2017,” reported Sean Becketti, chief economist at Freddie Mac. “Nonetheless, the turbulence aboard should continue to create demand for US Treasuries and keep mortgage rates near historic lows; thereby, allowing home sales to have their best year in a decade along with a boast in refinance activity.”
These results have lead experts to predict growth rebound in the remaining quarters of 2016. Based on these low rates, expect the refinance of share of originations to rise to 49 percent in 2015 – 8 percent above last month’s forecast. This means around $100 billion more in originations, bringing the total for 2016 to $1,825 billion.
With June’s sunny employment report over May’s release, the unemployment rate is expected to drop from 4.9 percent in 2016 to 4.8 percent in 2017.