Average rates on long-term mortgages continue to fall to new record lows, as the key 30-year loan dropped below 3% for the first time in 50 years.
The stagnant economic recovery in the face of the coronavirus pandemic is keeping inflation tamped down despite pent-up homebuying demand.
Mortgage buyer Freddie Mac says the average rate on the 30-year home loan fell this week to 2.98% from 3.03% last week. These are the lowest levels since Freddie Mac began tracking averages in 1971. The rate averaged 3.81% a year ago.
In their update, Freddie Mac says the low rates has led to increased homebuyer demand. Meanwhile, according to the Mortgage Bankers Association, refinancing applications increased recently, about 12 percent in the last week.
However, Freddie Mac warns that with an increase in coronavirus cases, the economy can stagnate and cause temporary job layoffs to possibly become permanent.
The average rate on the 15-year fixed-rate mortgage declined to 2.48% from 2.51%, from last week.