Shortly after the pandemic began, mortgage rates have been falling week after week, hitting historic lows. However, since states have started to open up and some people have been going back to work, rates had a brief uptick. As we mentioned last week, the question on people’s minds was whether rates would continue trending back upwards to where they were pre-coronavirus or if it was just a fluke.
In a statement made on June 15th, Fannie Mae predicted that these ultra-low rates will hold out all the way through the rest of the year and then drop even further in 2021.
Over the last six weeks, rates for 30 year fixed rate mortgages have stayed below 3.3%. Fannie Mae expects that the annual average rate for 2020 will be 3.2%. To put into perspective how low that really is, the previous record for the year was in 2016 when the annual average was 3.65%.
Then as we enter the new year, their analysts expect that rates will continue to drop to 2.9% in 2021.
Fannie Mae predicts that the sustained low rates will contribute to historically high refinancing rates, reaching up to 1.78 trillion dollars. If it does pan out that way, it will mean lots of homeowners will have lower monthly mortgage bills, putting some extra money in their pockets that in turn could be put back into the US economy.
If you want to take advantage of these mortgage rates and buy a home or rental property, email us or gives us a call at (323) 412-9060.