- The 30-year average US fixed mortgage rate fell to 2.81% from 2.87%, its lowest according to data from Freddie Mac dating back almost 50 years.
- The reading also marks the 10th all-time high this year, reflecting the drop in borrowing costs that fueled the rebound in the housing market.
- Sales of new and existing homes have thrived during the pandemic, but steadily rising prices will slow the rally and may delay homeownership for some Americans.
- “It’s important to remember that not everyone is in a position to take advantage of low rates given the effects of the pandemic,” said Sam Khater, chief economist at Freddie Mac.
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For the tenth time this year, mortgage rates have reached an all-time high.
The 30-year average fixed mortgage rate fell to 2.81% from 2.87% last week, Freddie Mac said in a statement Thursday. The reading is the lowest of data in nearly 50 years. The latest record low was 2.86% at the start of September.
The string of new lows in mortgage rates is unlikely to end anytime soon. The Federal Reserve said in September that its benchmark interest rate will likely stay close to zero until 2024, in turn limiting a rise in mortgage rates.
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Historically low borrowing costs fueled a boom in the real estate market despite the broader economic crisis. New home sales have picked up, so much so that only 3.3 months of supply remain if the pace continues. This is the shortest period in data going back to 1963, according to the Census Bureau.
Sales of existing homes have developed in a similar fashion. While the housing market presents a bright spot in the struggling US economy, the supply shortage has driven up prices and may soon force some to delay homeownership.
“A lot of people are taking advantage because the refinancing activity remains strong. However, it’s important to remember that not everyone can take advantage of low rates given the effects of the pandemic, ”Sam Khater, chief economist at Freddie Mac, said in the statement.
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