A trifecta of economic factors is making June a bonanza month for mortgage borrowers and new home buyers.  First up, mortgage rates keep moving lower, reaching a new three year low just this past week.  Inflation is brewing, leading to asset appreciation or more importantly, housing appreciation.  And the economy is moving along with wages looking up, job stability holding on, and businesses churning out profits.  It’s time to find the right property and use cheap financing to your advantage.

Based on the most recent survey of bank mortgage rates conducted by SelectCDrates.com on June 10th, the average 30 year mortgage rate dropped to 3.628%.  That’s a hair above 3.50% to borrow money for 30 years at a fixed interest rate.  With interest rates set to rise later this year and inflation headed higher as well, borrowers can let inflation eat away at the value of the monthly mortgage payment.

Consumer prices in the United States went up 1.1 percent year over year in April of 2016, the latest figures available.  The year over year figure is still relatively mild considering the inflation rate in the United States has averaged 3.30 percent from 1914 until 2016.  However, the monthly jump in the index of 0.4 percent in May is an increase over the previous month’s increase and the biggest increase in three years.

Prospective homebuyers and home loan borrowers may be looking at the ideal time to buy a new home.  Mortgage rates are low and the direction of interest rates is looking up.  Rate increases by the Federal Reserve are planned for the second half of 2016 and long term borrowing costs are sure to rise in the future as a result of Fed actions.  Higher interest rates down the road make mortgage rates look attractive now and will also help push inflation higher, keep housing prices moving along, and fuel wage growth.

Higher inflation and fixed borrowing costs are a home buyer’s best friends.  Millennial renters should also factor in two other key benefits of homeownership, the combined tax breaks of mortgage interest deductions and real estate taxes.  The tax breaks with low mortgage rates and borrowing costs make a compelling argument for homeownership over renting especially after rental rates have risen so dramatically in the past few years.

Today’s low mortgage rates are not just available for cookie cutter, conforming 30 year loans.  Results of the latest mortgage rate survey show 30 year jumbo mortgage rates falling almost ¼ of a percent below the 30 year conforming loan to 3.503%.  Government loan borrowers are also enjoying rates that are beneath those on standard conforming loans.  The average rate on 30 year FHA mortgages is down to 3.603 percent.

The most recent SelectCDrates.com weekly bank mortgage rate survey calculates the average rate offered on a variety of home loan products from the nations’ leading bank mortgage lenders for the week ending June 10, 2016.

The mortgage rate information obtained in the survey assumes the purpose of the mortgage loan is to purchase an existing single family home as a primary residence with a loan amount of $250,000 and an estimated property value of $325,000.  The actual mortgage interest rates for a specific property and borrower will depend on a number of factors including but not limited to, the loan type, the borrower’s credit profile, the property type, appraised value, occupancy, and loan amount.

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