Financial markets continue to find some relief as cooler inflation numbers continue to roll in. This morning, the Producer Price Index, a gage of prices paid for manufacturing inputs, came in lower than economists’ estimates. PPI year-over-year was 9.8% vs 10.4% expected and 11.3% the previous month.
Interest rates and stock markets both reacted positive, but nowhere near the upswing we saw yesterday. The 30-year fixed mortgage rate clocked in again at 5.18%. Making now a good time to lock in your mortgage rate. A lot can happen between now and the Fed’s next meeting in September.
Gas prices fall below $4
The average national gas price has finally fallen to $3.99 a gallon.
That’s still well above last year’s average. So, what does any of this have to do with home sales? The price of gas is an emotional barometer for most people. As gas prices ease, consumers, including homebuyers, might start to feel a little more confident about making future purchases. On the practical side, lower gas prices should lower transportation cost for building materials, which will hopefully get passed along to homebuyers.
15-year mortgage a favorable option?
Let’s get the big disadvantage out of the way. Yes, your monthly mortgage payment will probably go up. Now for all the good news. The current rate for a 15-year fixed sit at 4.75%. That’s pretty attractive considering the rate for a 30-year fixed is still well above 5.0%.
Buying or refinancing with a 15-year mortgage means you’ll pay thousands less in interest over the life of the loan.* Next, you’ll own your home free and clear in nearly half the time.
Also, you’ll build equity much faster. Meaning if you ever decide borrow against that equity to remodel your home, make emergency repairs or consolidate debt, you’ll have a lot more cash to tap into.** Thinks about it, especially if rates keep moving down.
* Savings, if any, vary based on consumer’s credit profile, interest rate availability, and other factors. Contact Guaranteed Rate, Inc. for current rates. Restrictions apply.
** Using funds from a Cash-out Refinance to consolidate debt may result in the debt taking longer to pay off as it will be combined with borrower’s mortgage principle amount and will be paid off over the full loan term. Contact Guaranteed Rate for more information.
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All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Guaranteed Rate does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Guaranteed Rate. Guaranteed Rate its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.
John Kistner is Guaranteed Rate’s Market Analyst. Market Updates are designed to provide readers with a high-level yet insightful view of how economic news, events and trends affect mortgage rates and the homebuying process.