If there is an upside to COVID uncertainty, this is it.
The average mortgage rate on a 30-year fixed loan dropped again to 2.87%. According to Mortgage News Daily, it’s another record low, and it’s about a full percentage point lower than a year ago.
It’s worth noting, however, that 2.87% is just the average. Some borrowers are getting rates even lower, as CNBC reports.
“There are pools of loans being sold right now with average rates of 2.625%, meaning some people are getting rates at 2.375-2.5%,” said Matthew Graham, chief operating officer at Mortgage News Daily. “While those likely involve some closing costs, that’s still nuts.”
This is good news for buyers trying to get into the market. And perhaps it is why new home sales nationally have risen for the third straight month. Mortgage News Daily reports that The U.S. Census Bureau and Department of Housing and Urban Development estimates that sales of newly constructed single-family homes in June was 13.8 percent higher than the May rate. Sales are now greater than the same month in 2019 for the first time since the pandemic struck, up 6.9 percent compared to June of last year.
Still, that doesn’t mean there isn’t uncertainty in the industry that is making lenders and investors nervous. Their is the still the risk that people will lose their jobs and not be able to make their monthly payments, or that the economy will go on lockdown again. To help manage these risks, the Federal Reserve is buying more mortgage-backed bonds to keep the market afloat and has instituted a mortgage bailout for borrowers hit financially by the crisis.
If you would like to talk more about buying or selling a home right now, give me a call. I’ll be happy to help you navigate the market during this unprecedented time.
Source: https://www.cnbc.com/2020/07/24/mortgage-rates-just-hit-another-record-low.html; http://www.mortgagenewsdaily.com/07242020_new_home_sales.asp