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Mortgage Rates Hit New Bottom for 10th Time

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Economics

Mortgage Rates Hit New Bottom for 10th Time


October 16, 2020
Dropping percentages
Photo: sewcream

For the 10th time this year, mortgage rates dropped to record lows. When will it stop? That’s up to the economy’s recovery, says Realtor.com. The average rate for a 30-year fixed-rate mortgage dropped down to 2.81% this week. But the market has been hot for months, and home prices have only increased. Yes, lower mortgage rates help a bit, but Realtor.com’s chief economist says although home prices are higher, most homeowners are indeed paying less for their mortgages, but only by about $80 a year. The chief economist also predicts mortgage rate normalization, or any sort of significant gains, will not be seen until next year and could drop even further.

The median home list price shot up 12.2% over last year in the week ending Oct. 10, according to realtor.com® data. That's due to a historic lack of homes for sale—inventory was down 38% compared with the same week last year—and a crush of buyers ratcheting up the competition.

After being stuck at home for months because of COVID-19, many folks want bigger homes with more land. In many markets, well-priced homes are going off the market within hours of receiving multiple offers over asking price.

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