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Having slipped below 3% for the first time in retrievable memory, the 30-year fixed-rate mortgage had made a symbolic return to 3.01% before slipping once again to 2.99% (for the week ending July 30).
Sam Khater, Freddie Mac’s chief economist believes that “It’s Groundhog Day in the mortgage market as rates continue to remain near historic lows, driving purchase demand over 20% above a year ago,” He further stated in a press release that “Real estate is one of the bright spots in the economy, with strong demand and modest slowdown in home prices heading into the late summer. Home sales should remain strong the next few months into the early fall.”
Online property database company Zillow’s economist Matthew Speakman feels that “As has been the case for the last few weeks, investors appear poised to stay in a holding pattern that will keep rates generally steady until any meaningful developments emerge showing the economy’s resistance to rising coronavirus case volumes, or the nation’s ability to contain and treat the virus. Should significant, positive news surface on either of those fronts, mortgage rates would likely move higher, possibly quickly.”
Matthew Speakman was however quick to add that “On the flip side, bad news on either topic will continue to place downward pressure on rates, but it’s likely that this pressure won’t drop rates much lower than they are today. As we’ve seen in recent weeks, the market isn’t eager to move rates much lower than their current levels, in part because these historically low rates have prompted a steady stream of business that could be tapping out many lenders’ capacity to field loan requests.”
To recall, the rates sat at 3.75% a year ago. The ‘15-year’ rate which was at 3.2% a year ago has come down to 2.51%. On the week-to-week chart, it stood at 2.54% a week ago.