30-year mortgage rate hits record low — again

Freddie Mac said the low rates give potential buyers more purchasing power

TRD NATIONAL /
Aug.August 07, 2020 09:00 AM
The rate on the 30-year mortgage fell to 2.88 percent, the lowest rate in 50 years (iStock)

The rate on the 30-year mortgage fell to 2.88 percent, the lowest rate in 50 years (iStock)

The average mortgage rate on America’s most popular home loan has hit another record-setting low.

The rate on the 30-year mortgage fell to 2.88 percent, the lowest rate in 50 years, Bloomberg reported, citing Freddie Mac. Rates have dropped eight times during the pandemic. Last month, the rate fell below 3 percent for the first time, registering at 2.98 percent.

The lower rates are “giving potential buyers more purchasing power and strengthening demand,” said Sam Khater, chief economist at Freddie Mac.

The Federal Reserve has kept its benchmark rate at near zero since the start of the pandemic, in an effort to soften the effects of the economic disruption. The low cost of financing has spurred new mortgage applications, which has inundated lenders with new requests for financing.

“This is definitely helping affordability,” said Tendayi Kapfidze, chief economist at LendingTree. “It’s also attracting a lot of people into the market who otherwise might not have been so quick to act.”

But not all home loan rates have seen such a steep decline. Mortgage rates for jumbo loans, which are typically used for luxury houses that do not meet conventional mortgage standards, have fallen to only 3.5 percent. It’s the first time in five years that the rates on jumbo loans have exceeded smaller, more traditional home financing options. [Bloomberg] — Georgia Kromrei 


Related Articles

arrow_forward_ios
(iStock)

A foreclosure crisis is looming — but here’s what’s different from 2008

A foreclosure crisis is looming — but here’s what’s different from 2008
Sales of existing homes in the U.S. hit a 14-year high last month, according to a new report. (iStock)

US home sales hit 14-year high

US home sales hit 14-year high
An increase in mortgage applications came despite interest rates ticking up (iStock)

Applications for home mortgages surged last week

Applications for home mortgages surged last week
United Wholesale Mortgage Mat Ishbia and Gores Holdings IV CEO Alec Gores (Photos via United Wholesale Mortgage and Gores)

United Wholesale Mortgage goes public with $16B valuation

United Wholesale Mortgage goes public with $16B valuation
(iStock)

Banks required balloon payments, stayed mum on foreclosure moratorium

Banks required balloon payments, stayed mum on foreclosure moratorium
Fed Board Governor Lael Brainard (Getty, iStock)

Fed wants banks to step up lending in low-income areas

Fed wants banks to step up lending in low-income areas
The number of single-family homes on the market hit historic lows in July, driving prices up (iStock)

US housing supply reaches nearly 40-year low

US housing supply reaches nearly 40-year low
Tom Steyer (Getty)

Ex-candidate Tom Steyer lists SF home for $11M

Ex-candidate Tom Steyer lists SF home for $11M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...