Brexit Brings Low Mortgage Rates

By now, we've all heard about Britain choosing to exit the European Union. After a few days of tumultuous activity on the stock market, what we here in the United States are now seeing as a result of Brexit is mortgage rates that are on the decline--excellent news for homeowners looking to refinance and for those in the market to purchase a home in San Francisco, Marin County or elsewhere.

According to Freddie Mac, 30-year fixed mortgage rates fell to 3.57% in June, the lowest they've been since 2013. They are also approaching historic lows from 2012 when rates hit 3.35%. The average annual mortgage interest rate in 2012 was 3.66 and it has been slowly climbing upward ever since, yet still remaining at all-time lows. For the first 6 months of 2016, the annual interest rate is 3.66%, the same as in 2012.

According to other sources, the average rate for a benchmark 30-year mortgage is 3.48%. Exact numbers may vary but the bottom line is, now is a fantastic time for home buyers and those looking to reduce their current home mortgage interest rate.

After raising rates in December 2015, the Fed was rumored to have been toying with a second interest rate hike but thanks to Brexit, sources says the likelihood of this occurring has declined to 16%, down from 43% 3 weeks ago and 81% in May.

Freddie Mac has data on mortgage rates going back to 1971. At no time during those 45 years have mortgages dropped below what we've seen during that past 5 years.

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