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Couple moving into new home | The Grove Frisco, a new home community in Frisco, TX

10 June . 2019

Mortgage rates below 4% are a “gift” for homebuyers, experts say

The average interest rate for a 30-year fixed-rate mortgage fell under 4% at the end of May, prompting Bankrate to call falling rates “an unexpected gift” for most homebuyers.

Within a few days of falling just below 4%, the average rate for a 30-year mortgage edged up a tad, to 4.03%, but national and global economic trends point toward continued low rates.

“Rates for mortgages change daily, but overall, they are very low by historical standards. If you’re in the market for a mortgage, it could be a great time to lock in a rate. Just be sure to shop around,” says a report in Bankrate, a financial advice and comparison website.

Why are rates getting lower? Investor jitters about the U.S. trade dispute with China, and about Brexit and the possibility of an economic recession in Europe, have triggered a worldwide “flight to quality” to United States Treasury bills.

Increased demand for U.S. Treasurys, widely regarded as one of the world’s safest haven for investors, has driven up bond prices and pushed yields downward. One of the results has been the downward pressure on mortgage interest rates.

“The sharp drop in rates comes as a surprise, as most experts were betting that rates would be on the rise,” Bankrate states. “For borrowers, however, this is an unexpected gift.”

Bankrate’s senior economic analyst, Mark Hamrick, advises homebuyers to take advantage of today’s low-interest rates while they can.

“Accurately predicting the future of rates is difficult indeed. So, instead of trying to outsmart the market, go with what you know for certain which is where rates are right now,” Hamrick advises. “In an uncertain environment, seize upon certainty where you can find it.”

Low-interest rates are just one part of an encouraging outlook for homebuyers. A CNBC article several more positive trends for anyone looking to buy a new home:

  • Affordability is the best it has been in more than a year. On a nationwide basis, the monthly payment for an average-priced home has decreased 6% (assuming a 20% down payment).
  • The monthly payment-to-income ratio has reached its lowest point in more than a year. It currently takes 22% of median income to purchase the average-priced home. That is well below the long-term average of 25.1%.
  • Home price increases are also cooling off. Home prices rose 3.8% annually in March. That was the first time since 2012 that price growth has fallen below the 25-year average of 3.9%.

Now is a great time to buy a new home in The Grove Frisco, now offering an increased selection of new-home choices, at prices from the high $400,000s to more than $1 million.

The Grove Frisco has plenty of new homes available for quick move-in from all of our best-in-class builders, so homebuyers can lock in a great interest rate and start enjoying a unique lifestyle with amenities like Orchard House, Swirl Cafe & Bakery, Adventure Park and miles of trails, along with highly regarded Frisco ISD schools.