By Ralph R. Ortega for Dailymail.com
The 30-year fixed mortgage interest rate fell below 3% for the first time, Freddy Mac reported on Thursday, adding that the historic drop led to increased demand from home buyers during the coronavirus outbreak. .
A federal mortgage investor weekly report shows that fixed 30-year mortgage interest rates fell to 2.98% for the first time since record keeping began in 1971.
“The decline has resulted in increased demand from home buyers and these low rates have been capitalized in asset prices to support the financial markets,” said the report.
Residential construction is considered an essential part of an economic rebound after the coronavirus epidemic.
The above chart from a report by Freddy Mac on Thursday shows that the 30-year fixed mortgage interest rate has fallen below 3% for the first time
However, Freddy Mac also said that a “compensating force for the economy” is increasing the cases of COVID-19 which continue to “stagnate” the recovery of the US economy after the pandemic.
“This economic downturn exposes many temporary layoffs to permanent job losses,” warned Freddy Mac in his report.
Freddy Mac’s latest report also shows that the 15-year fixed mortgage rate fell to 2.48%.
Meanwhile, 5-year variable rate hybrid mortgages rose at 3.06% compared to 3.02% a week ago.
Freddy Mac also said that a “compensating force for the economy” is increasing cases of COVID-19 which continue to “stagnate” the recovery of the US economy after the pandemic. Frontline healthcare workers are photographed to test COVID-19 in Homestead, Florida
Hundreds are pictured lining up for unemployment benefits in Frankfort, Kentucky. Freddy Mac warned that the “economic break” caused by COVID-19 “puts many temporary layoffs at the risk of ossifying into permanent job losses”
The fall in mortgage rate costs is the result of the interest rate cut by the Federal Reserve to almost zero to support the economy amid the devastating financial effects of the virus.
The compulsory closures of COVID-19 forced businesses to permanently close or file for bankruptcy and resulted in record unemployment.
So far, there have been 3,536,658 confirmed cases in the United States of coronavirus, which has been blamed for 138,040 across the country.
In a statement released in mid-March, the central bank said it was cutting rates to a target of 0% to 0.25%.
At the time, it was the second drop in interest rates in less than two weeks, as part of an emergency measure taken by central bankers to deal with the effects of the pandemic.
“The effects of the coronavirus will weigh on economic activity in the short term and pose risks to the economic outlook. In light of these developments, the committee decided to lower the target range, “said the Fed in a statement.
The fall in mortgage rate costs is the result of the interest rate cut by the Federal Reserve to almost zero to support the economy amid the devastating financial effects of the virus. In the photo, Federal Reserve Chairman Jerome H. Powell on Capitol Hill
Meanwhile, 1.3 million Americans filed new unemployment benefit claims last week, bringing the total number of people fired from work during the pandemic to nearly 50 million.
The number of workers made redundant in search of unemployment benefits during the week ending July 11 remained stuck at 1.3 million for the second consecutive week, the Labor Department announced on Thursday.
While the numbers have been steadily decreasing for 14 weeks, the latest data remains at a historically high level indicating that many companies are still cutting jobs as the COVID-19 epidemic intensifies.