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Today, several notable refinance rates slumped.
Both the 15-year fixed and 30-year fixed saw their mean rates decrease. The average rate on 10-year fixed refinance mortgages also declined.
As of early this year, refinance rates spiked and appear likely to continue on their upward trajectory. Short-term interest rates have already been raised twice by the Federal Reserve this year, and more are to come.
Given the current rate environment, it is prudent for borrowers to look hard at the numbers before taking out a new home loan. With refi rates on the rise, the cost of borrowing is higher than it was a year ago. With that in mind, your refinance rate isn’t the only thing that matters. The fees you pay to close a home loan matter, and can add up to thousands of dollars.
Let’s take a look at the current refi rate trends.
The average mortgage refinance rates are as follows:
Compare refinance rates for a wide range of different loans here.
Refinance Rate Forecast: What Is Driving Mortgage Rate Change?
The annual inflation rate came in it at 9.1% in June, according to the data from the Bureau of Labor Statistics. It still puts it at the level of the 40-year highs we’ve experienced the past few months. And that’s bad news for refinance rates.
To fight high inflation the Federal Reserve has been raising short-term interest rates. There are also geopolitical events that are poised to add to our inflation woes. China’s COVID lockdowns and the war in Ukraine could both exacerbate existing supply shortages. And we haven’t even started to feel these supply shocks, “it’s going to take months for those disruptions to seep fully into the supply chain,” Lindsey Piegza, chief economist at Stifel Financial told NextAdvisor.
All of this means that we could be stuck with high inflation for longer than we’d like, which increases the likelihood that the Fed will need to be aggressive in raising rates.
Is It a Good Time to Refinance Right Now?
A rate and term refinance can save you money in the long run, but typically you’ll want the new rate to be at least 0.75% to 1% below your current rate. And the number of homeowners with rates well above the current market rates has dwindled dramatically as rates …….