Mortgage rates slide to lowest levels in almost five months

Mortgage rates slide to lowest levels since winter as investors grow skeptical of economic recovery. Janna Herron, Personal Finance Editor at Yahoo Money breaks down the details.

Video Transcript

KRISTIN MYERS: Welcome back. Personal Finance Editor Janna Herron is here for today's Your Money segment. And mortgage rates are sliding to their lowest levels since winter. Janet, tell us more about that.

JANNA HERRON: Yeah, so the 30-year fixed mortgage, which is the most popular home loan, decreased to 2.9%. And that is the lowest rate since February 18. So that's at the start of the home buying season. And the reason mortgage rates are falling is because they're following the yield on the 10-year Treasury, which also fell based on economic concerns and expectations for the Fed's next move on rates.

KRISTIN MYERS: So Janna, what does this mean if you are a homeowner? Is this a good opportunity for you to refinance your existing home loan?

JANNA HERRON: Absolutely. If you haven't already done so, you should go and refinance. And there are about 13.9 million homeowners who can shave 75 basis points off of their current rate and save about almost $300 a month off their mortgage payment. So that's a really great opportunity if you already own a home. If you're a home buyer, things are a little bit more difficult, partly because the housing market is not very normal right now. We have a shortage of homes for sale so people are bidding up prices. And so any break that you get from these low mortgage rates have been erased because of those higher home prices.

KRISTIN MYERS: Yeah, I was just wondering about that because we've just seen such a hot real estate market. And some of those prices are just absolutely insane right now, of course fueled by those lower mortgage rates. Just, where are rates going to go? If we had to have you pull out your crystal ball right now, where do you see them going in the future?

JANNA HERRON: The experts that I've talked to say for the rest of this summer, rates will stay right around 2.93%. They'll balance out. They'll balance down. But you're still going to be a great rate. I don't think we're going to see new all-time lows, which we saw in January when rates got down to 2.65%, unless something really terrible happens in the economy, and growth looks like it's not going to happen. So the rates are going to stay really low. I mean, under 3%, at 3%, you can't get a better deal.

KRISTIN MYERS: All right, absolutely. And if you are a homeowner, make sure you take advantage. If you are a home buyer, hopefully you've got a lot of cash out there to beat off some of those other bidders in this really competitive market. Yahoo Finance Personal Finance Editor Janna Herron, thank you so much for breaking all of that down for us.