Mortgage rates remain at all-time low
HousingWire reports that mortgage rates remain at record lows as some states have hit new highs for COVID-19 infections, driving money managers to seek fixed-income investments like mortgage bonds. “Low mortgage rates have been a bright spot in the U.S. economy since the Federal Reserve stepped into the bond market in March and began buying fixed assets,” says the article. Fed Chairman Jerome Powell has pledged to keep purchasing Treasuries and mortgage bonds for as long as support is needed.
HousingWire says rates aren’t expected to jump any time soon. Fannie Mae, the larger rival to Freddie Mac, said in a forecast earlier this month that the average 30-year fixed rate for 2020 probably will be 3.2%, down from 3.9% in 2019. This would be the lowest annual average ever recorded.
Purchase demand for homes has rebounded quickly
Freddie Mac’s June 25 report says mortgage rates remained low and flat compared to the previous week. The report also notes that after the Great Recession of 2007–2009, it took more than ten years for purchase demand to rebound to pre-recession levels. By contrast, in the current pandemic crisis, the rebound took less than ten weeks. The quick rebound in purchase demand partly reflects deferred sales as well as interest from buyers who want to take advantage of low mortgage rates.
Housing market remains strong and mortgage rates will likely remain low
Narin Seera, Vice President of Capital Markets Operations at Academy Mortgage, says: “While the U.S. housing market remains strong for new and existing home sales, the promise from Federal Reserve to maintain the current low rates through 2022 provides further impetus to the U.S. real estate market and the sector financing it.”