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Mortgage rates drop to second-lowest levels; homeownership rate rises to 12-year high

  • Aug 3, 2020
Sales Jump

Average U.S. mortgage rate breaks the 3% threshold again

HousingWire reported on July 30 that the average U.S. rates for fixed-rate mortgages fell to the second-lowest levels on record. Freddie Mac Chief Economist Sam Khater said, “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.”

U.S. pending home sales increased 17% in June, the second consecutive month of double-digit gains, as the low mortgage rates spurred demand for homes, the National Association of Realtors said.

U.S. homeownership rate soars to an almost 12-year high

The U.S. homeownership rate soared to an almost 12-year high in the second quarter of 2020 as low interest rates allowed more Americans to qualify for mortgages; this is the highest homeownership rate since 2008’s third quarter. The second quarter 2020 rate jumped to 67.9%, from 65.3% in the prior quarter, based on a Census Bureau report. (The report noted that a change in methodology may have impacted the numbers: Because of the pandemic, in-person interviews were suspended and most of the survey was conducted by telephone.)

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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