Mortgage rates fell to a new record for the 15th time this year, adding fuel to the fire for buyers desperate to block low rates.
The 30-year fixed-rate mortgage averaged 2.67% for the week ended Dec. 17, down four basis points from the previous week, Freddie Mac FMCC
reported Thursday. The benchmark loan fell to the previous low of 2.71% earlier this month and has remained so far.
A year ago, the 30-year loan rate was a completely higher percentage point. During this same period of 2019, these loans had an average rate of 3.73%.
The 15-year fixed-rate mortgage fell five basis points to an average of 2.21%, while the three-year indexed hybrid adjustable-rate mortgage remained at 2.79%.
The rate hike “comes when the Fed kept interest rates close to zero and Congress showed signs of progress on a new stimulus bill as unemployment demands rose,” said Danielle Hale, an economist at head of Realtor.com.
This week, the Federal Reserve has announced that it will not move interest rates from where it is now. The Federal Reserve controls short-term rates, which do not have a direct impact on the mortgage market. However, mortgage rates are based on changes in longer-term bond yields, such as the 10-year TMUBMUSD10Y Treasury,
– Bond investors often take their cues from Fed stocks, influencing long-term rates.
At the same time, more pronounced changes could occur in the mortgage market as lawmakers put themselves in a new stimulus package. “The dynamics of mortgage rates over the past few months have been less dependent on economic data and more on policy-related issues, both fiscal and monetary, and on epidemiological developments,” said Matthew Speakman, an economist at Zillow ZG ,
Investors have anticipated that lawmakers would reach an agreement on new stimulus funds, so some of those expectations have already become interest rates in recent weeks, Speakman said. But if Congress surprises with a larger package than expected, this could “put upward pressure on mortgage rates,” he added.