US mortgage rates have dropped to another all-time low. Can they go even lower?
US mortgage rates have dropped to a new all-time low. Can you go deeper?
Mortgage rates keep rewriting the record books. According to mortgage giant Freddie Mac, 30-year fixed-rate mortgage rates have dropped to an all-time low nearly 50 years ago this week - and it's the fourth time since early March.
The typical 30-year rate has dropped to 3.13%, according to Freddie Mac, but a survey of lenders by Mortgage News Daily found that average interest rates fell below 3% for the first time earlier this month.
Will interest rates continue to fall, fall, fall? As this classic toy, the Magic 8 Ball says: "Signs are yes" - but experts say that extremely low prices cannot be taken for granted.
The case for even lower prices
Andrii Yalanskyi / Shutterstock
Long-term mortgage rates are based on government bond rates. These returns are so spectacularly low that Suze Orman, a celebrity in personal finance, recently said in a podcast, "If you ask me, you must be crazy to be in bonds at this point."
Yields eased this week and bond prices rose due to reports of rising coronavirus cases in many parts of the United States. Investors were concerned about the ability of the economy to recover soon, said Matthew Speakman, economist at Zillow.
"This triggered a sell-out of stocks and a flight to the safe haven of bonds - something that usually lowers mortgage rates," said Speakman.
In a new forecast, mortgage company Fannie Mae expects average 30-year mortgage rates to decrease further to 3.0% by the end of this year and to only 2.9% throughout 2020.
Doug Duncan, chief economist at Fannie Mae, says extremely low mortgage rates will continue to please homebuyers - and homeowners looking for refinancing savings.
"We ... expect the extremely low mortgage rate environment to contribute to a historically high level of refinancing as households' balance sheets and incomes improve," Duncan said in a press release.
During this week's pre-congressional appearances, Fed chairman Jerome Powell promised that the Fed would continue to keep rates close to zero as it raised the alarm about the corona virus economic threat. The Fed's extremely low interest rates are helping to keep mortgage rates down.
The potential for rising interest rates
Maxfromhell / Shutterstock
Freddie Mac has also brought out a new mortgage rate outlook, but it's not quite as tempting as Fannie Mae's.
Although Freddie Mac's chief economist Sam Khater says rates should "stay at record lows for the foreseeable future," the forecast predicts 30-year rates to average 3.4% this year and 3 in 2021 3, Will be 2%.
In the near future, we could have reached a turning point in mortgage rates, says Zillow's spokesman.
"Further bad news regarding the rise in coronavirus cases would likely drive rates down, possibly to new lows. However, rates could just as easily rise again, especially if key economic data or measures to contain or treat the virus are important are improvements, "he says.
That said, if you're thinking about buying a home or refinancing, don't try to time the market and wait for the perfect mortgage rate, as interest rates can easily move in either direction.
Compare the interest rates of a number of lenders. If you find one that looks remarkably low and works well for you, apply for the loan and work with the lender to lock the interest rate - so it doesn't get out of your grasp.
You should check here to buy the best price guaranteed products.
Seth Meyers Nails Tucker Carlson for COVID Mandate Contradiction
CIA official who traveled with director to India experienced Havana syndrome symptoms: Report
CG: KC@CLE G2 - 9/20/21
Orioles vs. Phillies Highlights
Boxing's Eastern Corner | Episode 1
An Oregon elementary school teacher showed up to school in blackface to protest a vaccine mandate