Tags: mortgage rates | home loans | housing | covid | pandemic

Mortgage Rates Stay at Record Low as 30-Year at 2.72 Percent

Mortgage Rates Stay at Record Low as 30-Year at 2.72 Percent
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Wednesday, 25 November 2020 10:56 AM

U.S. long-term mortgage rates remained at record lows this week as the coronavirus pandemic continues to threaten the economy.

Mortgage finance giant Freddie Mac reported Wednesday that the average rate on the 30-year fixed-rate home loan was unchanged this week from a record low 2.72%. A year ago, the benchmark rate was 3.68%.

The rate on 15-year fixed-rate loans stayed at 2.28%. It was 3.15% a year ago.

Interest rates have fallen this year as the virus batters the economy and the Federal Reserve pours money into the financial system to support a recovery.

Low rates have encouraged Americans to buy homes or refinance existing mortgages.

Meanwhile, mortgage applications increased 3.9 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.

The Market Composite Index, a measure of mortgage loan application volume, increased 3.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The Refinance Index increased 5 percent from the previous week and was 79 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 4 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 19 percent higher than the same week one year ago.

"30-year fixed mortgage rates dropped seven basis points to 2.92 percent, another record low in MBA's survey. Weekly mortgage rate volatility has emerged again, as markets respond to fiscal policy uncertainty and a resurgence in COVID-19 cases around the country. The decline in rates ignited borrower interest, with applications for both home purchases and refinances increasing on a weekly and annual basis," said Joel Kan, MBA's Associate Vice President of Industry and Economic Forecasting.

"The ongoing refinance wave has continued into November. Both the refinance index and the share of refinance applications were at their highest levels since April, as another week of lower rates drew more conventional loan borrowers into the market," Kan said.

"Amidst strong competition for a limited supply of homes for sale, as well as rapidly increasing home prices, purchase applications increased for both conventional and government borrowers. Furthermore, purchase activity has surpassed year-ago levels for over six months," Kan added.

The refinance share of mortgage activity increased to 71.1 percent of total applications from 69.8 percent the previous week.

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U.S. long-term mortgage rates remained at record lows this week as the coronavirus pandemic continues to threaten the economy.
mortgage rates, home loans, housing, covid, pandemic
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2020-56-25
Wednesday, 25 November 2020 10:56 AM
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