Mortgage rates fall to new lows as coronavirus impacts nation
Mortgage rates fell to their lowest level since Freddie Mac started reporting this data in 1971, as the coronavirus shutdown continued to play havoc with the economy.
The continued uncertainty is why the Federal Open Market Committee announced Wednesday it was keeping short-term rates at near-zero levels.
"The size and depth of the secondary mortgage market is helping to keep rates at record lows. These low rates are driving higher refinance activity and have modestly helped improve purchase demand from their extremely low levels in mid-April," Sam Khater, Freddie Mac's chief economist, said in a press release. "While many people are benefiting from low mortgage rates, it's important to remember that not all people are able to take advantage of them given the current pandemic."
Zillow economist Matthew Speakman had similar comments when that company released its own rate tracker Wednesday evening.
"The headline mortgage rate fell to new lows this week, but conditions across the market remain much more varied than usual as the mortgage industry continues to grapple with uncertainty brought upon by forbearance programs and rapidly changing borrower profiles," Speakman said.
"Nearly 7% of mortgages were in some form of forbearance last week, a rate that continues to increase, albeit at a slowing pace. The risk of losing money on these loans has led originators to tighten lending standards for certain loan types and borrowers. While some borrowers could be quoted rates close to the lowest they’ve ever been, others either with less-than-excellent credit scores or seeking an atypical loan type — like jumbo or FHA loans — may be offered a much-higher rate. With participation in forbearance programs likely to see continued increases, this disconnect across the mortgage industry is likely going to continue for the coming weeks."
The 30-year fixed-rate mortgage averaged 3.23% for the week ended April 30, down from last week when it averaged 3.33%, according to the Freddie Mac Primary Mortgage Market Survey. A year ago at this time, the 30-year fixed-rate mortgage averaged 4.14%.
The 15-year fixed-rate mortgage averaged 2.77%, down from last week when it averaged 2.86%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.6%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.14% with an average 0.4 point, down from last week when it averaged 3.28%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.68%.