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Mortgage rates fall below 3%; new home construction jumps 17.3%

  • Jul 20, 2020
Low Interest, New Construction

Freddie Mac says mortgage rates fell below 3% for the first time in 50 years

Freddie Mac reported on July 16 that mortgage rates fell below 3% for the first time in 50 years. “The drop has led to increased homebuyer demand,” said the article. “However, the countervailing force for the economy has been the rise in new virus cases which has caused the economic recovery to stagnate.”

New home construction jumps 17.3% in June

Housing starts, authorizations, and completions are all up since May. HousingWire reported last week that new home construction continued to recover in June from April’s five-year low in June as privately-owned housing starts jumped 17.3% from May. “Despite economic disturbances caused by the COVID-19 pandemic, housing starts only fell 4% below the June 2019 rate,” said the article.

Robert Dietz, chief economist of the National Association of Home Builders, said, “Housing clearly shows signs of momentum as challenges and opportunities exist in the single-family market. Builders report increasing demand for families seeking single-family homes in inner and outer suburbs that feature lower density neighborhoods.”

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.”

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