U.S. mortgage rates fall below 3%: a historic level.
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U.S. mortgage rates fell below 3% for the first time ever as the economy continues to struggle with the effects of the COVID-19 crisis.
Historically low rates:
The average 30-year fixed-rate mortgage fell to a record low of 2.98 percent last week, according to Freddie Mac. That's the lowest level in nearly 50 years, according to the mortgage giant's survey.
The average rate for a 15-year fixed-rate mortgage fell to 2.48 percent, and the average 30-year rate fell below last week's record low of 3.03 percent. This marks the seventh new low since March.
What impact on the real estate market?
Record low rates have boosted demand among homebuyers, according to Freddie Mac. But the mortgage giant warns that the rise in new COVID-19 cases is putting a damper on the economic recovery, and that the pause could turn temporary layoffs into permanent job losses. That could have a consequential negative impact on the residential market.
At the same time, rates that are more than 80 basis points below last year's level mean that financing for a typical home is $125 less per month than a similarly priced home at last year's rates, according to a study by the economist department of "Realtor.com."
It is clear that this banking environment provides additional leverage for real estate investors seeking new opportunities in the U.S. Historically low interest rates, coupled with motivated sellers and a potential decline in values for the fourth quarter of 2020 provide an ideal environment for investing in real estate or refinancing assets.
Sources: Realtor.com, Freddie Mac, CNN Business
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