- The average 30-year fixed mortgage rate in the United States fell to 2.81% from 2.87%, its lowest in Freddie Mac’s data from nearly 50 years ago.
- The reading also marks a tenth all-time low this year, reflecting the collapse in loan costs that fueled the housing market recovery.
- New and existing home sales thrived during the pandemic, but steadily rising prices will slow the rally and may delay home ownership for some Americans.
- “It is important to remember that not all people are able to take advantage of low rates given the effects of the pandemic,”
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For the tenth time this year, mortgage rates hit an all-time low.
The average 30-year 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 the data from nearly 50 years ago. The latest all-time low was 2.86% seen in early September.
The series of new mortgage rate lows are unlikely to end anytime soon. The Federal Reserve indicated in September that its benchmark interest rate will likely remain close to zero until 2024, in turn limiting a rise in home loan rates.
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Historically low financing costs have fueled a surge in the housing market despite broader economic turmoil. Sales of new homes have increased, so much so that only 3.3 months of supply remain if the pace remains stable. This is the shortest data period dating back to 1963, according to the Census Bureau.
Sales of existing homes followed a similar trend. While the housing market is a bright spot in the struggling US economy, supply shortages have pushed prices up and may soon force some to delay home ownership.
“Many people benefit as refinancing activity remains strong. However, it is important to remember that not all people are able to take advantage of the low rates given the effects of the pandemic,” Sam Khater, chief economist, said in the statement. by Freddie Mac.
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