The average 30-year fixed-rate mortgage fell to a record low of 2.98% last week, according to Freddie Mac. That’s the lowest level in the mortgage giant’s nearly 50-year survey. The 15-year fixed-rate mortgage fell to 2.48%.
The average rate for a 30-year fixed-rate mortgage fell below last week’s record low of 3.03% and marks the seventh new low since March.
Record rates have led to increased demand among home buyers, according to Freddie Mac.
But the mortgage giant warns that the surge in new virus cases is holding back the economic recovery, and this pause risks turning temporary layoffs into permanent job losses. That could negatively affect home buying.
The record low rates came amid a roller coaster of optimism and pessimism about the economy, said Danielle Hale, chief economist at Realtor.com.
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“On the downside, an increasing number of coronavirus cases in an increasing number of states demonstrates how difficult it is to contain the virus, especially when it comes to boosting the economy,” he said. “On the positive side, signs of progress toward a coronavirus vaccine give hope that there is a path to a new normal in which health problems do not dominate decision making.”
This week, concerns about the economy have helped lower mortgage rates. Meanwhile, the opportunity created by lower mortgage rates is driving home purchases, and is driving new mortgage applications from a year ago, he said.
Rates that are more than 80 basis points below last year’s level mean that typical home financing is $ 125 less per month compared to housing of the same price at last year’s rates, he said.
“This is opening doors for many home buyers, even as the number of homes available for sale decreases,” said Hale.
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