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Mortgage rates hit record lows due to stable Fed

Mortgage rates set a new record for the 15th time this year, adding fuel to buyers desperate to keep interest rates low.

30-year fixed-rate mortgages averaged 2.67% for the week to December 17, down 4 basis points from Freddie Mac FMCC last week.
+ 0.84%
Reported on Thursday. Benchmark loans fell to a previous low of 2.71% earlier this month and have remained there to date.

A year ago, interest rates on 30-year loans were completely higher by percentage points. At this same time in 2019, the average interest rate on these loans was 3.73%.

Fixed-rate mortgages for 15 years fell 5 basis points to an average of 2.21%, while 5-year Treasury-indexed hybrid floating-rate mortgages were stable at 2.79%.

Realtor.com Chief Economist Daniel Hale said, “Feds have fallen as the Fed maintains zero interest rates, Congress shows signs of progress in new stimulus packages, and unemployed claims have increased.” Stated.

This week, the Federal Reserve Board announced that it would not move interest rates from its current location. The Federal Reserve manages short-term interest rates that do not directly affect the mortgage market. However, mortgage rates are driven by changes in long-term bond yields such as the 10-year Treasury bond TMUBMUSD10Y.
0.914%
— Bond investors are often inspired by the Fed’s actions to influence long-term interest rates.

At the same time, more pronounced changes in the mortgage market could come as legislators settle on new stimuli. Matthew Speakman, economist at Zillow ZG, said:
+ 3.03%..

Investors expected lawmakers to reach an agreement on a new stimulus fund, and some of those expectations have already been burned into interest rates in recent weeks, Speakman said. But if Congress was surprised by a larger package than expected, it “could put some upward pressure on mortgage rates,” he added.

Mortgage rates hit record lows due to stable Fed

Source link Mortgage rates hit record lows due to stable Fed

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