Interest rates declined sharply in the first half of 2019 as the bond markets priced in expectations for slower economic growth. The yield on the benchmark 10-year US Treasury bond decreased from over 3% last Fall to just below 2% in June 2019. The general decline in interest rates has now made its way into the mortgage market with 30-year mortgage rates now below 4% in some areas.
Interest rates are still above the lows from the cycle when the 10-year Treasury bond yield hit long-time lows of less than 1.5%. However, the recent change has taken interest rates back to ultra-low levels when compared to historical norms.
With interest rates at such low levels, homeowners who purchased during the past few years may benefit from reviewing their refinancing options. In addition, anyone who did not take advantage of the ultra-low rates of the past may also benefit from refinancing their mortgage to reduce their interest rate.
Today, lower mortgage rates are even more attractive for many homeowners as they may not benefit, or may benefit very little, from the mortgage interest tax deduction due to the increased standard deduction that was a part of the Tax Cuts and Jobs Act of 2017.