It seems like every week we’re writing another article about mortgage rates hitting a new historic low! At the beginning of July, Freddie Mac announced that at 3.07%, the average rate for a 30-year fixed mortgage was the lowest it had ever been since they started collecting that data in 1971.
This week, another milestone was reached when the average 30-year fixed mortgage rate hit 2.98%, down from 3.03% the week before. Financial analysts had predicted that rates would eventually dip below 3%… But not until 2021! Meanwhile, the average 15-year fixed mortgage rate hit 2.48%. At the beginning of July, it was at 2.56% which was only a seven-year low, but now, it’s the lowest rate in 30 years.
Why are rates so low?
Obviously, the pandemic and the recent record high spikes of coronavirus cases in many states have contributed to it. But what’s more directly affecting the rates is the Federal Reserve. At the beginning of June, the Fed announced that it would continue to buy mortgage-backed securities for around 120 billion dollars a month in an effort to support the mortgage market.
Historically low mortgage rates will entice homeowners to refinance, which will save people money that they can in turn put back into the economy. The rates will also incentivize people to buy homes, creating a higher demand in the market. Right now, supply is very low, so an overwhelming demand will push builders to create more housing. With all the bad news we’re surrounded with these days, it’s nice to have this bright spot!
If you want to take advantage of these mortgage rates and buy a home or refinance, email us or gives us a call at (323) 412-9060.