Eave’s Monthly Mortgage Rate Roundup series is a monthly feature summarizing the major economic news over the last month that affected interest rates, alongside our projections for the future. 

Eave wishes all readers a happy New Year! Now that the holidays are over, many consumers will be turning their attention towards home buying in 2019. Winter is the perfect time to take stock of your finances, and do a little research to help you in your home search. And with mortgage rates dropping, now may even be a great time to purchase a home.

Here’s what we saw from mortgage rates in 2018 and what we expect to see in 2019:

Looking Back

For the most part, market and mortgage interest rates went up throughout 2018. The U.S. economy exceeded expectations and performed strongly all year. This economic boom drove the Federal Reserve to raise their benchmark rate four times during 2018, increasing mortgage rates dramatically.

Things began to shift at the tail end of the year. The global economy started to show signs of slowing down and the stock market took a tumble. Many were worried about the Federal Reserve being hell-bent on raising rates in 2019 at the same time as the slowdown possibly hitting America.   

Looking Ahead

What can you expect from mortgage rates in 2019? Right now, rates are in a free fall. Recession fears have officially taken root and mortgage rates have gone down sharply — so much so that our rates are now the lowest they’ve been since we launched Eave. Across the industry, mortgage rates are currently around half a percentage point lower than they were in November of 2018.

What does this mean? The idea of a recession is being taken seriously by market-watchers. Typically, stock market movements are leading indicators of recessionary trends, and as of late, the stock market has been way down. While it’s true that many aspects of the US economy remain healthy with only modest indications of economic slowdown, the stock market’s poor performance continues to stoke fear that a recession is imminent.  

This doesn’t, however, mean that mortgage rates will remain this low all year. We still expect to see rates rise moderately in 2019, as we predicted in our 2018 year-end roundup. But savvy home buyers may be able to take advantage of this short rate dip and score a deal.

What This Means for You:

Now is the time to buy! With rates the lowest they’ve been in months, and experts predicting that they’ll be on the rise again soon, now is a great time to make a move into your dream home. What’s more, market conditions are strong for those who are ready to upgrade: The luxury home market is a buyer’s market, and the starter home market is a seller’s market. And while winter isn’t exactly peak home buying season, there are plenty of good reasons to buy during the cold months. For one thing, there’s way less competition from other home buyers. Plus you can enjoy all kinds of individualized attention from your real estate team.

So take advantage of these amazing rates (and lowered demand!) while you can.

Eave’s Approach

At Eave, we look closely at several economic data sets daily. Of course, we’re tuned into the Federal Reserve. But we look at other data points too. One thing we’re always tracking is growth and decline in the housing sector. This includes how many new homes are being built, and how many existing homes are selling. We also look at general factors driving economic growth, like the behavior of individual consumers, industries and production, and small business, amongst others. Over time, it becomes easier for us to analyze patterns and trends that influence the economy.

The Roundup in a Nutshell:

Recession fears have caused mortgage rates to drop to their lowest point in months. But they won’t stay this low for long — they’ll likely increase moderately in 2019. If you can afford to take advantage of market conditions and make a move now, you could save thousands on your new home!  

At Eave, we benchmark our rates daily, so you get the best possible deal on your mortgage. Check out our real-time mortgage rates here.