Significant Mortgage Interest Rate Increase - What You Need to Know

Posted by Mike Brown Group on Monday, March 23rd, 2020 at 9:00am.

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Photo Credit: iStock.com/marchmeena29

Late last week, in the span of a few hours, the 30-year fixed mortgage interest rate jumped a percentage point. According to Movement Mortgage Senior Loan Officer Todd Shreeve, "there are a number of factors contributing to the recent increase." He continues, "one of the factors...over the past couple of weeks interest rates have been very low. When rates were at their low point, it caused an unprecedented number of refinance applications. The result was the lending industry couldn't absorb the volume of applications that came in, so we began to see rates inch up over the past few days."

The demand for refinance applications is one cause, but what about the coronavirus and the markets?

"The covid-19 virus has added a lot of uncertainty in the markets, and we've seen the stock market have some really rough days. Historically, when the stock market has seen a decline, the bond market has been a safe haven for investors. That's not the case this time around," Shreeve says.

However, there's good news and optimism to be had:

"Lenders have been tasked with making loans available to homebuyers and people looking to refinance and lower their monthly payments. In light of the recent increase in rates, we expect rates to remain really good, making it affordable for homebuyers to get into the home of their dreams at an affordable payment. We expect rates to remain low, and the uncertainty we are currently in will fade as our country gets answers to the current challenges we face. This (event) will pass, and we will come out and be stronger than ever," he says.

The market for homes here in Idaho is going to continue to be strong, and while mortgage interest rates have ticked up in recent weeks, they're still lower than they've been in years. The expectation is that they will moderate. If you're looking for a home, the team at The Mike Brown Group is ready to serve.

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