Mortgage Rates Hit Record Lows for Three Consecutive Weeks!
Freddie Mac has reported on July 16th that the average interest rate for a 30-year mortgage dropped below 3%, settling in at 2.98% for the week. For a 15 year loan the average rate was 2.58%. Once again interest rates have reached the lowest rates ever recorded in the fifty years that Freddie Mac has been tracking the data!
Last week’s reported rate reached the lowest point in the history of the survey, which dates back to 1971 (See graph below):
What does this mean for Buyers?
This is huge for homebuyers. Those currently taking advantage of the increasing affordability that comes with historically low interest rates are winning big. According to Sam Khater, Chief Economist at Freddie Mac:
“The summer is heating up as record low mortgage rates continue to spur homebuyer demand.”
In addition, move.com notes:
“Summer home buying season is off to a roaring start. As buyers flooded into the market, realtor.com® monthly traffic hit an all-time high of 86 million unique users in June 2020, breaking May's record of 85 million unique users. Realtor.com® daily traffic also hit its highest level ever of 7 million unique users on June 25, signaling that despite the global pandemic buyers are ready to make a purchase.”
Clearly, Buyers are capitalizing on today’s low rates. As shown in the chart below, the average monthly mortgage payment decreases significantly when rates are as low as they are today.A lower monthly payment means savings that can add up significantly over the life of a home loan. It also means that qualified Buyers may be able to purchase more home for their money. Maybe that’s a bigger home than what they would be able to afford at a higher rate, an increasingly desirable option considering the amount of time families are now spending at home given today’s health crisis.
Bottom Line
If you are in a position to buy a home this year, let’s connect to initiate the process while mortgage rates are historically low.
