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How Low Can Mortgage Rates Go?

July 27, 2016
Mauro Harto
Mauro Harto

Just when it seems like mortgage rates can’t get any lower, they do. Are rates as low now as they’ve ever been?

Rates Are Close to Historic Lows

Recently the national average on a 30-year fixed rate mortgage fell to 3.41%, which is close to the historically low rate of 3.36% in December 2012. Five months later, in May 2013, the rate on the 15-year fixed mortgage dipped to a new low of 2.64%1.

“The recent ‘Brexit’ vote in Great Britain caused interest rates to fall to all-time lows in July, which pushed mortgage rates down as well,” said Gerry Dugal, Hancock and Whitney Bank Treasurer. “Markets don’t like uncertainty, and there are a lot of uncertainties surrounding Brexit.”

A look at mortgage rates since 1998 shows an overall downward trend. On June 30, 1998, the national average rate on a 30-year fixed mortgage was 6.87%. Amid fears of inflation, the Federal Reserve instituted a series of interest rate increases in 1999 and 2000 that resulted in a peak of 8.38% in May 2000. In the 16 years since that high, rates have steadily gone down.


 Mortgage Rates National Averages

 Source: Bankrate.com


According to the U.S. Home Mortgage Index from Bloomberg.com1, as of mid-July the average 30-year fixed mortgage rates in our five-state service area were consistent with the national average: Mississippi 3.34%; Louisiana 3.36%; Alabama 3.34%; Florida 3.39%; and Texas 3.42%.

Low mortgage interest rates and stable property values are good for our local economies, according to Sandi Gumpert, Secondary Market and Post Closing Manager with Hancock and Whitney Bank Mortgage Services. "Even though our region has seen its share of stress over the last ten years with hurricanes, the BP oil spill and the recent energy downturn, property values in many parts of our service area have remained relatively stable. As global markets experience turmoil, we're seeing an influx of new investors as people realize the potential of expanding credit options and sound property values," Gumpert said.


Thinking of Purchasing or Refinancing?

What does all this mean? If you’ve been considering purchasing a home or refinancing your current mortgage, now's a great time. Industry mortgage rates have hit near record lows and have been slowly adjusting to a slightly higher "normal" over the past few weeks. Many experts believe that rates will continue in this range for the short term and slowly begin to increase as the year ends. 

Learn more about our wide variety of mortgage options.


1Bloomberg.com, Markets, Bankrate.com U.S. Home Mortgage 30-year Fixed National Average,  http://www.bloomberg.com/quote/ILM3NAVG:IND accessed July 15, 2016.