New Record Low for 30-Year Mortgage Rate: 2.88%
August 7, 2020
For the eighth time this year, the 30-year mortgage rate hit an historic low. Home buyers and refinancing homeowners could now potentially lock in the lowest rates Freddie Mac has recorded since it began tracking such data in 1971.
“The resilience of the housing market continues as mortgage rates hit another all-time low, giving potential buyers more purchasing power and strengthening demand,” says Sam Khater, Freddie Mac’s chief economist. “We expect rates to stay low and continue to propel the purchase market forward. However, the main barrier to rising demand remains the lack of inventory, especially for entry-level homes.”
The National Association of REALTORS® predicts that rates could fall further over the next few weeks, since 10-year Treasury yields, which mortgage rates tend to follow, also have retreated slightly.
Jumbo mortgages, on the other hand, cannot be sold to Fannie Mae and Freddie Mac and do not carry a government guarantee. Therefore, they are more difficult to obtain, with lenders requiring higher down payments and stellar credit. “The housing market is hot because of the lower mortgage rates, but the luxury market may remain soft due to jumbo loan issues,” NAR economists say.
Freddie Mac reports the following national averages with mortgage rates for the week ending Aug. 6:
- 30-year fixed-rate mortgages: averaged 2.88%, with an average 0.8 point, falling from last week’s 2.99% average. The lowest average for the 30-year fixed-rate mortgage had previously been set in July at 2.98%. A year ago, 30-year rates averaged 3.60%.
- 15-year fixed-rate mortgages: averaged 2.44%, with an average 0.8 point, falling from last week’s 2.51% average. A year ago, 15-year rates averaged 3.05%.
- 5-year hybrid adjustable-rate mortgages: averaged 2.90%, with an average 0.4 point, falling from last week’s 2.94% average. A year ago, 5-year ARMs averaged 3.36%.
Freddie Mac reports average commitment rates, along with average fees and points, to reflect the total upfront cost of obtaining a mortgage.Source: Freddie Mac