The average mortgage rate for a 30-year fixed-rate mortgage fell below 3 percent for the first time Freddie Mac began tracking weekly rates in 1971. The average 30-year fixed-rate mortgage was reported at 2.98 percent, down from 3.03 percent last week.
“Mortgage rates fell below 3 percent for the first time in 50 years,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “The drop has led to increased homebuyer demand, and these low rates have been capitalized into asset prices in support of the financial markets.”
“However, the countervailing force for the economy has been the rise in new virus cases which has caused the economic recovery to stagnate, and this economic pause puts many temporary layoffs at risk of ossifying into permanent job losses.”
The 15-year fixed-rate mortgage averaged 2.48 percent, down slightly from last week’s 2.51 percent average and down from last year’s 3.23 percent average. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.06 percent, up slightly from last week’s 3.02 percent average and down from last year’s 3.48 percent average.
While mortgage rates continue to dip, mortgage applications are on the rise, according to the Mortgage Bankers Association’s weekly applications survey. Applications increased 5.1 percent from the previous week, according to the report, published Wednesday.
The unadjusted mortgage purchase index was up 5 percent week over week and 16 percent year-over-year, while the refinance index increased 12 percent week over week and 107 percent year over year.
“Purchase activity remains relatively strong, despite the continued economic uncertainty and high unemployment caused by the ongoing pandemic,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.
The historically low mortgage rates — coupled with scarce inventory — are setting up what could be an extremely competitive summer for homebuyers, according to a weekly market survey released by realtor.com.
“Today’s market remains tipped in favor of sellers as would-be spring buyers are shopping well into what would normally be summer vacation season,” Danielle Hale, chief economist for realtor.com, said in a statement. “Homebuyers, trying to take advantage of record-low mortgage rates and make up for lost time, are finding limited and more expensive options.”
“Although sellers are slowly acclimating to this unexpected surge in buyer interest, inventory is still lagging behind demand which is driving quick time on market and listing price growth on par with this time last summer.”