July 6, 2020
Mortgage Rates Hit an All Time Low Ahead of Fourth of July Weekend
Prior to the COVID-19 Pandemic, any Real Estate Agent would tell you it’s more likely to see flying pigs than to see 30-year mortgage rates to drop below the 3% mark. With the onset of the destructive Coronavirus Pandemic, we are seeing many industries shaken up in ways no one could have imagined possible. Precedence and predictions made prior to the start of 2020 have flown right out the window.
Now, back to the main question: Is it possible for mortgage rates to drop below 3%? The simple answer is “Maybe? It’s possible?”. No one has a crystal ball to predict what will happen a few months down the road. However, if this downward trend continues, we could realistically see rates drop lower than they are currently.
For this week ending July 2, the 30-year fixed mortgage rate averaged 3.07%, according to Freddie Mac. In comparison, the same loan one year ago would have had an average rate of 3.75%. While these numbers are no reason to panic, they do represent a significant drop in percentage year-over-year.
The previous record was set just two weeks ago with the average 30-year mortgage rate at 3.13%. Throughout 2020, mortgage rates are dropping at an astronomical pace in comparison to recent years. While other outside factors may be impacting these rates, the Coronavirus Pandemic is the main culprit. It has caused never-before seen turmoil and confusion in markets and the overall economy.
The future of mortgage rates will largely depend on how the government chooses to combat the impact of the pandemic. State governments will be faced with a choice of which they prioritize more: boosting their state’s economy by allowing businesses to reopen or imposing stay-at-home orders to prevent the spread of the virus. In many states across the country, we have seen surges of COVID-19 cases. This increase in cases has caused many states who were in the beginning stages of reopening to go back into various stages of lockdown.
Even though the U.S. is experiencing record-low mortgage rates, consumers are not responding with as much demand for these loans as credit lenders and banks would have hoped. These companies have purposefully lowered their rates to stimulate consumer interest. However, according to data from the Mortgage Banker’s Association, the number of applications for home mortgages has dropped since last week and is predicted to drop even more in the coming weeks.
While there are less people applying for these low home mortgages, one can only imagine that the rates will continue to drop to continue efforts of stimulating the economy. These low rates would be very helpful for homebuyers looking to get a great deal and move into their next dream house.
While there is quite a bit of uncertainty in our world, one message rings true: we are currently experiencing some of the lowest mortgage rates the country has ever seen. Because these rates are most likely going to increase soon, now is a great time to consider applying for that mortgage to purchase the home of your dreams!