The rate for the popular 30-year mortgage remained at a record low a second week, according to data released Thursday by Freddie Mac, as the economy continued to grapple with the fallout from the coronavirus pandemic.
The average for the 30-year fixed rate stayed at 3.13% with an average 0.8 point. (Points are fees paid on top of the interest rate to a lender that equals 1% of the amount of the loan.) The rate was 3.73% a year ago.
"With rates now at all-time historic lows, it's hard to imagine that people may be holding out for something even better," Paul Buege, president and chief operating officer of Inlanta Mortgage in Pewaukee, Wis., said in an email.
The average for the 15-year fixed rate increased to 2.59% with an average 0.8 point. The rate was 2.58% a week ago and 3.16% a year ago. The average for the five-year adjustable rate fell to 3.08% with an average 0.5 point from a week ago. The rate was 3.09% a week ago and 3.39% a year ago.
Economic uncertainty over spiking coronavirus cases may keep mortgage rates down a while, according to some housing experts and loan officers watching the market. A contributing factor: Jittery investors tend to move their money from the stock market into the relative safety of 10-year Treasury note, which results in lower yields. Mortgage rates tend to follow the path of the 10-year Treasury note.
Still, "the No. 1 driver of low mortgage rates is the accommodating Federal Reserve stance to keep interest rates low and to buy up mortgage-backed securities," said Lawrence Yun, chief economist of the National Association of Realtors. "We will see mortgage rates stay near this level for the next 18 months because of the significance of the Fed's stance."
Although Yun said mortgage rates may change slightly based on fears of increasing coronavirus cases or unemployment claims, those will be small moves compared to the influence of the Fed's activities.