Currently Reading

Low Mortgage Rates Heat Up Market, Raise Future Mobility Concerns

Advertisement

Low Mortgage Rates Heat Up Market, Raise Future Mobility Concerns


May 26, 2020
for sale sign home
By Aldeca Productions

On May 21st, the interest rate on a 30-year home loan was 3.24 percent—a full percentage point lower than the same time in 2019, according to Freddie Mac. Now that demand is heating up, economists forecast that the low interest rates combined with pent-up demand will bolster sales for the rest of the year. After months of slow purchasing activity, any increase is welcome. However, Forbes reports that such low interest rates may have a downside: Buyers that lock in these low rates will have less incentive to move later on and shoulder higher monthly mortgage payments, leading to less mobility.

In a coronavirus-created environment of severe inventory shortages and rising prices, home shoppers do have one advantage in the form of extremely low interest rates. Yet, while propitious today, the latter bear repercussions for the U.S. housing market for years to come.

According to mortgage buyer Freddie Mac, the interest rate on a 30-year home loan was 3.24% on Thursday, about a whole percentage point lower than a year ago. Even before the Covid-19 pandemic, rates have been sliding in response to market forces and Federal Reserve policies, previously aimed at keeping the U.S. economy chugging during its longest expansionary period.  

Read More
 

Tags

Related Stories

Economics

As Mortgage Rates Lower, Millions of Americans Can Save Big

With mortgage rates down to a new low, a record 19.4 million Americans could save hundreds per month. The average interest rate for Freddie Mac’s…

Financing

Disaster Recovery through Job Order Contracting

When disaster strikes your community, job order contracting is a reliable, efficient way to fund rebuilding efforts.

Market Data + Trends

Mortgage Demand Shrinks to 6-Month Low

Record low mortgage rates are proving to be unhelpful as homebuyer demand falls for the sixth time in seven weeks. Mortgage application volume…

Advertisement
Advertisement

More in Category




Advertisement
Advertisement

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.