Brexit Triggers Drop in U.S. Mortgage Rates

Wednesday, July 13 at 10:00 AM
Category: Arvest News

The window for home buying and refinancing is good for consumers.

LOWELL, Ark. – Great Britain’s recent decision to secede from the European Union is impacting the United States’ housing market with a significant drop in interest rates.

The British exit, commonly referred to as Brexit, prompted the rate of a 30-year fixed mortgage to drop to an average of 3.41 percent, compared to where it stood a year ago at 4.08 percent. According to the Federal Home Loan Mortgage Corporation, Freddie Mac, it’s the lowest such rate since May 2013. In addition, the average rate on a 15-year fixed mortgage recently dropped to 2.74 percent, compared to 3.2 percent last year. 

“Mortgage rates were already low for potential homebuyers and this drop creates an even better opportunity for them to save money and secure an even lower rate when purchasing or refinancing a home,” said Steven Plaisance, President and CEO for Arvest Bank Mortgage Division. “We’re seeing a lot of activity, and cases where refinancing is saving some customers more than $200 per month.” 

The Mortgage Bankers Association reports a 14.2 percent increase in mortgage applications following the drop in interest rates that was triggered by the Brexit vote.

This renewed activity in the U.S. housing market comes at a time when the industry has seen low inventory and higher home prices. Industry leaders are hopeful that the recently adjusted rates will continue to spark more activity, as homeowners decide to act quickly.  

“There is no way to predict how long these rates will remain, or in which direction they will go next,” Plaisance said. 

Homeowners considering refinancing typically find it to be advantageous when they can get an interest rate that is three-quarters of a percentage point, or more, below their current fixed rate.  

Tags: Home Loans, Mortgage, Press Release
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