Mortgage rates fall to record low for 12th time in 2020
Mortgage rates in the United States hit a record low for the 12th time this year amid the coronavirus pandemic, according to data released Thursday by federal home loan organization Freddie Mac.
The group reported that the average for a 30-year, fixed loan dropped to 2.78 percent, a new record as lowered interest rates from the Federal Reserve during the pandemic have led to cheaper mortgage rates for homeowners and buyers.
The new record also marks the lowest mortgage rate Freddie Mac has recorded since it started collecting data in 1971.
Mortgage rates have been on the decline since March, when COVID-19 first began to spread rapidly across U.S. states. According to the Freddie Mac data, the average mortgage rate has remained below 3 percent since July.
Bloomberg reported Thursday that the Federal Reserve’s plan to continue holding its benchmark rate near zero should keep mortgage rates low, but increased demand for homes is now overtaking supply, leading to bidding wars in some areas across the country.
While several industries have suffered economically amid coronavirus lockdown orders, including restaurants, movie theaters and other entertainment centers, the housing market has recorded a flurry of home sales in recent months.
A report released in September from the National Association of Realtors (NAR) recorded that home sales had risen by 2.4 percent in August, marking the highest level since 2006.
The report also noted that the median price of homes purchased in August was $310,600, up 11.4 percent from August 2019, when the median home price was $278,800.
“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” Lawrence Yun, NAR’s chief economist, said in a statement at the time. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”
The same month, NAR’s monthly survey on home sales reported that the number of pending home sales hit a record high in the survey’s 19-year history, increasing by approximately 8.8 percent since July and up nearly a quarter since last August.
The pending home sales index also reached a high-water mark of 132.8, meaning sales were 32.8 percent higher than the index’s 2001 starting level of 100.