Mortgage rates fell this week, returning to record lows, according to a Bankrate survey released Wednesday.
The average cost of a 30-year fixed-rate mortgage stood at 3.05 percent, down from from last week’s 3.08 percent, according to Bankrate’s national survey of lenders. The 15-year fixed fell to 2.47 percent, a new record low. Bankrate includes origination points and other fees in its figure. The 30-year fixed-rate loans in this week’s survey included an average total of 0.34 discount and origination points.
Mortgage rates have plunged since the coronavirus recession began earlier this year, propping up a surprisingly strong housing market. Home prices kept rising even as unemployment soared. The combination of tight supply and robust demand has sparked bidding wars in many corners of the country.
Defying the economic downturn, home values have been rising. Mortgage giant Freddie Mac said it expects home prices to grow 5.5 percent for 2020 and 2.6 percent for 2021.
“Even as the economy faces challenges from the coronavirus pandemic, the housing market has been showing strength,” Sam Khater, Freddie Mac’s chief economist, said in a statement Wednesday.
Mortgage experts polled by Bankrate are divided on where they expect rates to go in the coming week. Just over half expect rates to hold, while 43 percent expect a decline.
Jeff Lazerson, president of Mortgage Grader in Laguna Niguel, California, says the refinance rush has slowed, easing pressure on rates. “Mortgage refinance lines are shortening,” he says. “Lenders have to compete with each other by sharpening their pencils.”