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Mortgage Rates Hit Unexpected Low for 2014 with Homes.comWhether you want to consider unemployment levels, international crises or even consumer spending, there are a lot of factors that can affect mortgage rates. So to say the least, it can hard task to accurately predict the teeter-tottering cost of financing a home. At the beginning of 2014, even the most experienced economists would have told you that mortgage rates were going to witness notable increases throughout the year. In fact, some predicted that we could expect to see a 30 Year Fixed mortgage hit 5% by the end of the year. Despite all the data supporting these claims, here we are at the beginning of September and mortgage rates are at the lowest level of the entire year!

According to Freddie Mac’s most recent Primary Mortgage Market Survey, expectant homebuyers will be glad to hear that 30 year fixed mortgage rates are sitting at 4.10% for the second week in a row! What may come as a surprise is that these rates are lower than the 4.12%, which marked the year’s previous low. Also, 15 year fixed rates are at 3.23% and 5 year adjustable rates are at 3.01%, both of which are the lowest of the year.

Wondering why the predictions of our nation’s top economists were so far off?

Political events like those occurring in Ukraine, Iraq and Israel over the past few months are perfect examples of why mortgage rates go through these fluctuations. Investors with lingering uncertainty of how these events will play out are more likely to play it safe and put their money into bonds, rather than making risky decisions elsewhere. As you may already know, mortgage backed securities are a form of bonds. As more and more of these bonds are purchased, lenders will become confident in the fact that they will be getting their money back. This will drive down mortgage rates and as a result, more consumers will start thinking about purchasing a home.

In addition to the events happening abroad, there are domestic situations that are also playing a big part in these low rates. At the beginning of 2014, it was predicted that the economy was going to see stellar levels of growth. With an improving job market and decreasing unemployment levels, one would think that the economy would be thriving. Unfortunately, there are still millions of U.S. citizens that remain unemployed or under-employed. A relatively weak job market means that less money will be getting pumped into the economy, which is unfortunate because two-thirds of the GDP comes directly from this consumer spending.

It’s hard to say what will happen with the current mortgage rates, especially with there being no end in sight for the political dilemmas that were mentioned above. With that being said, the slower than expected growth in China and Europe’s debt problem are both signs that mortgage rates have the potential to stay low. It’s unlikely that mortgage rates are going to exceed 5%, but even with a benchmark of the last 5-6 years, hopeful homebuyers should consider anything under the expected 5% to be a low interest rate.

This is great news for your clients, as it would be a good time to start taking advantage of these low rates and seriously consider purchasing a home. Even for those who already own a home and are locked in with a higher rate, now would be a good opportunity for them to refinance and start saving money!

Looking for even more mortgage related information? Check out all the articles from’s featured mortgage expert Shashank Shekhar!