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Interest rates at a record low

With economic fears growing due to coronavirus, a silver lining is mortgage rates drop.

KENT COUNTY, Mich. — It’s a great time to be a home buyer.

The stock market slumped due to coronavirus fears, but that’s great news for interest rates.

“I know we always say it’s a great time to buy,” said Kevin Wildman, a branch manager with Lake State Mortgage, “but we’ve never seen anything like this before.”

Wildman says the rates are at historic lows. That’s because investors pulled money out of the stock market and put it into the bond market. That caused interest rates to drop.

He said depending on the programs, most rates are in the 3 percent range. He predicts by this summer, the trend will continue, and they can drop to somewhere in the 2 percent range.

Currently, rates are about a point and an eighth lower than this time last year. 

“For the home buyer, it means they can afford more,” said Wildman, “Their payments are a lot less. It lets them buy maybe a little more house than they would have, if the rates were at a point higher than they were last year.”

RELATED: Grand Properties Group gives tips on mortgage process and low interest rates

In West Michigan, that’s turning into a sellers’ market. In fact, inventory is so low, home builders are seeing a steep increase.

“The inventory that’s currently on the market is very limited,” said Karin Kay, a sales manager with Sable Home, “there’s not a lot options for people, and people are compromising to find something they can move into.”

Kay said this is the perfect time to take advantage of the low interest rate, lock it in, and take an option to build a new home.

“We’ve been higher than average,” said Kay, “in the last few months, because it’s letting people purchase the extra $5,000 to $10,000. It can sometimes open up a new world for people for homes on the market.”

It’s also a good time to consider refinancing.

“Refinancing is up 250% from last year,” said Wildman, “in the term of mortgage applications.”

RELATED: When deciding on a refinance or new home purchase, it’s not all about the interest rate

Wildman believes the trend will continue, and the interest rates will dip as the summer home buying season ramps up. He also says West Michigan could withstand what other locations probably could not, due to it’s housing maket.

“Even if the country goes into a recession,” said Wildman, “West Michigan will still be pretty strong. Everyone is moving here because it’s a great place to live. So it’s going to be a hot market this summer.”

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