April 6, 2020

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Mortgage Rate Trends: The Three Percent Range

Mortgage Rate Trends

Mortgage loan rates have been on a wild ride since the advent of the COVID-19 coronavirus outbreak; for a time FHA mortgage loan rates dipped below the three percent threshold.

How wild has the ride been? FHA mortgage rates hit a 52-week range of rates between the lowest at 2.75% at the low point during the outbreak and just over 4% at its highest moment in the 52-week range.

What does that mean going forward? For the average consumer, not much.

It is pure speculation to say we may or may not see rates dip below the three percent range but borrowers should likely assume that those rock-bottom rates are gone and proceed without the temptation to float rather than lock in a mortgage rate commitment with the lender in hopes history might repeat itself.

At press time, FHA mortgage loan interest rates are back in the three percent range between 3.25% and 3.50% (over the last two days).

These numbers assume ideal conditions including a well-qualified borrower and may not be offered to those with lower FICO scores or other financial qualifications.

Tough Times In The Housing Market

Coronavirus issues make buying a home more complicated; Fannie Mae and Freddie Mac have issued revised appraisal guidelines to accommodate current conditions.

FHA loan rules are subject to review and revision in a similar way though no FHA Mortgagee Letters announcing such options were available at press time. It’s early days yet (in the grand scheme of things) and such revisions may be debated internally before moving forward (assuming there ARE revisions planned ala Fannie and Freddie).

Some potential home buyers at this stage are wondering why we’re publishing updates about the housing market right now as though people are still gathering in public to do open houses and other events designed to help house hunters.

But not all parts of the country are locked down, some DO still gather (for better or worse), but more importantly, many borrowers were already at a place in their home loan process where they have committed to a home and need to tend to the other important details of buying the home.

Look At Today’s Rates, Don’t Fret Over Yesterday’s Numbers

These borrowers may or may not already have interest rate lock commitments with their lenders, they may be negotiating add-ons to the loan such as discount points, Energy Efficient Mortgage options, etc.

The bottom line is that if you need to pay attention to mortgage loan interest rates right now, it is a very good idea to talk to your loan officer about your goals for the loan, your financial needs, and DO NOT fret about missing lower rates that were briefly available during the market’s volatile ride through the outbreak.

Joe Wallace - Staff Writer

By Joe Wallace

March 24, 2020

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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