Mortgage Rates Fall to Record Low for 12th Time This Year

Mortgage rates in the U.S. fell to another record low.

The average for a 30-year, fixed loan dropped to 2.78%, the lowest in data going back to 1971, Freddie Mac said Thursday. It was the 12th record low this year. The previous one, 2.8%, held for two weeks.

The decline in borrowing costs that began in March, as the coronavirus roiled financial markets, shows no signs of stopping. Cheap loans have powered a housing rally that has bolstered the pandemic economy. Purchases have soared and millions of current homeowners have been able to save money by refinancing.

The Federal Reserve’s plan to hold its benchmark rate near zero for the time being should keep a lid on mortgage rates, which have been below 3% since July. But demand for homes is far outstripping supply, sparking bidding wars in some areas. The resulting price gains are putting homeownership out of reach for many Americans.