WASHINGTON–Average mortgage rates continue to hit record lows and the 30-year could drop below 3% before year-end, depending on how the economy performs during the ongoing coronavirus pandemic.
The average 30-year fixed-rate mortgage fell to a record low of 3.07% last week, according to Freddie Mac, the lowest level in the nearly 50 years the company has conducted its survey. The 15-year fixed-rate mortgage dropped to 2.56%.
The average rate for a 30 year-fixed mortgage dropped below the previous record low of 3.13% that was set in June and marks the fifth new low since March, Freddie Mac reported. One year ago, the rate was 3.75%.
"Today's report shows mortgage rates declined as investors reacted to the surge in COVID cases and the Federal Reserve's concerned outlook for economic recovery," said George Ratiu, senior economist at Realtor.com, in an interview with the Wall Street Journal.
Even with rates moving toward the 3% mark, lenders maintained tight underwriting standards which contributed to a decline in mortgage applications for the second consecutive week, Raitu added.
Pending Sales Index Jumps
The National Association of Realtors last week reported its pending sales index jumped a record 44% in May, according to the National Association of Realtors, but it’s unclear whether the resurgence can continue given the broader economic uncertainty.
Last week’s mortgage applications dropped 1.8% from the week before, according to the Mortgage Bankers Association's weekly application survey.