The benchmark 30-year fixed-rate mortgage fell this week to 3.05 percent from 3.10 percent, yet another in a string of record lows, according to Bankrate’s weekly survey of large lenders.
Rates have continued to slide after the Federal Reserve vowed earlier this month to keep borrowing costs as low as possible to help the economic recovery from the coronavirus.
“With the presidential debates heating up and the election cycle becoming even more tense look for rates to marginally drift lower as investors search for certainty,” said Derek Egeberg, certified mortgage planning specialist and branch manager, Academy Mortgage, Yuma, Arizona.
Jeff Lazerson, the president of MortgageGrader, agrees. “Mortgage rates will move down this week as pandemic, raging fires and political bickering weigh on the economy.”
Meanwhile, home prices are still advancing at a rapid pace. The S&P CoreLogic Case-Shiller index of home prices in 20 U.S. cities jumped 3.9 percent in July from a year earlier. That was the biggest one-month rise since 2018. These ultra-low rates and a lack of inventory have pushed prices up all over the country.
The price rise accelerated from July, which saw a 3.5 percent advance.
Metro areas seeing the biggest home price gains include Phoenix, up 9.2 percent from a year earlier; Seattle, 7 percent; and Charlotte, 6 percent. All the top cities saw gains, although the smallest increases were in Chicago, up less than 1 percent; New York, 1.3 percent, and San Francisco, 2.5 percent.