The rate on a 30-year fixed mortgage maintained its lowest-ever average of 2.71 percent this week, according to Freddie Mac. That record was first achieved last week.
With the U.S. economy in recession because of the coronavirus pandemic, mortgage rates have plunged. The 15-year fixed mortgage rate also held steady at 2.26 percent.
In a separate survey of rates by Bankrate, the average 30-year rate fell slightly, reaching a new record by that metric of 2.99 percent — the first time Bankrate’s number has ever dipped below 3 percent. The gap with Freddie Mac’s number is because Bankrate’s figure includes points and origination fees averaging 0.32 percent, while Freddie’s number excludes those costs. Freddie Mac said its average is accompanied by an average of 0.8 of a point.
“Mortgage rates remain at record lows, resisting their typical correlation to Treasury yields, which have recently been moving higher,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “Mortgage spreads – the difference between mortgage rates and the 10-year Treasury rate – are declining from their elevated levels earlier this year. Although today’s mortgage spread is about 1.8 percent and still has some room to move down if the 10-year Treasury continues to rise, it’s encouraging to see that the spread is almost back to normal levels.”
Where do we go from here?
In the weeks and months ahead, the mortgage market may show some fluctuation, but these record-low rates probably aren’t going to last forever. Most industry watchers think rates will start a slow march upward, although they’ll still remain very low by historical standards, probably for years to come.
In the coming week, most mortgage experts polled by Bankrate think rates will remain stable.
“The rise of the 10-year has stalled, and so will the movement of mortgage rates,” said Ralph McLaughlin, chief economist and senior vice president of analytics at Haus.