U.S. long-term mortgage rates fell this week to a record low for the 16th time in 2020, reflecting an economy hard hit by the coronavirus pandemic
Mortgage giant Freddie Mac said Thursday that the average rate on a 30-year fixed-rate home loan fell to a record low of 2.66% from 2.67% last week. A year ago it stood at 3.74%
The average rate on 15-year fixed-rate loans, popular with homeowners who want to refinance their mortgages, fell to 2.19% from 2.21%. A year ago, it was 3.19%.
This week, the 5-year adjustable rate mortgage has not changed, at 2.79%. A year ago, it was 3.45%.
Aided by minimal rates, the real estate market has been a source of strength in an economy affected by the coronavirus outbreak. The Federal Reserve has raised the interest rate it controls to zero in an effort to help the economy rebound after a spring shutdown.
But home sales have stalled due to lack of housing in the market. On Wednesday, the Commerce Department reported that sales of new single-family homes collapsed 11% from October to November, although purchases continue to increase nearly 21% from a year ago.
“As of 2021, we expect rates to remain stable, but the key short-term factor will be the trajectory of the COVID-19 pandemic and the execution of the vaccine,” said Sam Khater, chief economist at Freddie Mac .