A bleaker talk from Federal Reserve Chairman Jerome Powell has been greeted by yet another historic drop in mortgage rates, which have returned to a record low of less than 3% in a daily poll.
In two days of testimony before Congress this week, including a Tuesday appearance in which he wore a mask and a bottle of hand sanitizer nearby, the US central bank leader said the economy is facing an “extraordinarily uncertain” recovery. of the coronavirus pandemic.
Infections have increased rapidly and many states have halted their reopening plans.
But as Powell sounds the alarms, the Federal Reserve’s policies that have pushed mortgage rates to the depth of the trade appear to be doing some magic in the economy. Experts say the housing market is recovering and could pull the United States out of its COVID-19 recession.
How low have mortgage rates gone?
Mortgage rates fell to an average of 2.94% on Tuesday for a 30-year fixed-rate mortgage, and that ties a record low reached earlier this month, Mortgage News Daily says.
For rates these days, “it’s about the coronavirus,” says Matthew Graham, director of operations for MND.
“If it seems that the economy can slowly return to business, rates will feel pressure to move forward,” he writes. “If the coronavirus appears to retain the upper hand, rates could continue to slowly advance to the lowest levels of all time.”
Today’s cheap mortgage rates have helped start a fire in the housing market. Pending home sales – the number of homes under contract – shot up a record 44.3% from April to May, after two months of pandemic-related declines.
“This has been a spectacular recovery for contract firms, and demonstrates the resilience of American consumers and their undying desire for home ownership,” says Lawrence Yun, chief economist at the National Association of Realtors.
“This recovery also talks about how the housing sector could lead the way towards a broader economic recovery,” adds Yun.
Fed chief Powell welcomes the signs of recovery, but says the economy remains fragile.
“We have entered an important new phase and we have done it earlier than expected,” he told lawmakers in remarks prepared for hearings on Monday and Tuesday. “While this pickup in economic activity is welcome, it also presents new challenges, in particular the need to keep the virus under control.”
Can you get a mortgage rate less than 3%?
Worrying news about the coronavirus keeps investors anxious and contributes to the latest declines in interest rates. The government’s top infectious disease expert, Dr. Anthony Fauci, warned Congress on Tuesday that new cases of the virus could reach a staggering 100,000 per day.
Mortgage rates tend to follow interest, yields, and Treasury bonds. Yields have plunged as the money has come out of stock and become bonds as a safer investment amid all the uncertainty about the COVID-19 outbreak.
This is how mortgage rates have receded into record territory in the Mortgage News Daily survey. But lenders aren’t offering super low rates uniformly, Graham warns.
“Different borrowers will see different prices,” he says. “This is evident, but it is much more pronounced than before the coronavirus.”
The rate you get depends on your own circumstances, like your credit score. Additionally, rates can vary widely among lenders, by as much as 1 percentage point or more, a recent LendingTree study found. In other words, one lender could offer you a 30-year loan at 2.95%, another could offer you a much more rigid 4% -like mortgage.
To find the lowest rate available to you, you should shop around. Gather rate offers from multiple lenders and compare them side by side to find the best deal.
Don’t forget to use the same approach when purchasing or renewing your homeowners insurance. You can easily go online and get a ton of home insurance quotes to compare rates and find your perfect policy.
