Following the recent Fed announcement that there will be no further rate hikes in 2019, the average rate for 30-year fixed home loans dropped from 4.40 to 4.34 percent, according to Mortgage News Daily.
Mortgage rates loosely follow the 10-year Treasury yield, which dropped sharply on the heels of the latest Fed statement, CNBC reports. In a blog following the news, Mortgage News Daily COO Matthew Graham wrote, "This is about as big of a change as anyone expected. It means the Fed will be buying more bonds more quickly," adding, "And bond buying results in lower rates, all other things being equal."
Even small rate moves can have a big impact on homebuying, especially since so many buyers today are facing overheated home prices and are therefore on the edge of being able to afford a home at all. Looking at the 30-year fixed rate on a $300,000 mortgage, every 25 basis point move down means a savings of $50 on a monthly payment. With the rate now down about 75 basis points from November, that's a savings of $150 per month.
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