Right before the country was immersed in a pandemic, low interest rates dominated the real estate conversation. Buried under all the breaking news surrounding coronavirus, they’ve quietly dipped even lower. If homebuyers know where to look, they will find some lenders are handing out loans in the 2-3 percent range, according to Realtor.com. Though most lenders have inflated their rates to deal with the risk, some economists say that more will follow suit in the coming months. It may not be a surefire saving grace, but the low rates are the break the housing industry needs to restart its engines and make up for lost time.
One of the few silver linings for real estate in the middle of this devastating coronavirus pandemic has been record-low mortgage interest rates. And housing experts predict those ultralow rates will likely fall even further—venturing into the unprecedented 2% range.
That could give the flagging housing market—deeply hampered by state and local lockdowns, uncertainty about COVID-19, and a sputtering economy—a much needed boost. Lower rates equate to lower monthly housing mortgage payments, meaning many buyers will suddenly be able to afford homes with higher price tags.
"We expect mortgage rates to stay low and possibly slip lower," says realtor.com Chief Economist Danielle Hale. "We’ll flirt with the 3% threshold for a while before we go below it.
Some Lenders Now Offer Bargain Mortgages, but Experts Say They May Not Be a Good Idea
Americans can now buy a home with just 1% down, but experts warn there are risks associated with bargain mortgages
Younger Generations Are Staying Away From the Housing Market—Here’s Why
Gen Zers and Millennials are most disadvantaged by a financial crisis caused by soaring inflation and stagnant wage growth, and as a result, many are boycotting a volatile housing market
FHA Introduces Plan to Help Mortgage Borrowers With Monthly Payments
The Federal Housing Administration is working to reduce monthly payments for homeowners struggling to pay their mortgages by introducing a new payment supplement program