The pandemic resulted in a near perfect situation for the housing market: Local governments mandated that people stay indoors as much as possible and interest rates continued to slide. These two key factors are why the housing market has boomed amid the pandemic, according to HousingWire. The most important factor, though, remains mortgage rates. Although almost everything went remote, and much remains remote, spurring dozens of new needs from a home, it was not enough to keep the market afloat. The chief economist for the National Association of Realtors says low interest rates are the top reason. A secondary demand has come from telecommuting.
People now see their home not only as a place to live, but as a shelter during a national health crisis, Yun said. It’s also an office and, for families with children, often a part-time school.
Mortgage rates began tumbling in mid-March after the Federal Reserve announced it would buy mortgage bonds and Treasuries to keep credit flowing amid the pandemic. It was similar to a fixed-asset program it created during the financial crisis a dozen years ago.
The average U.S. rate for a 30-year fixed mortgage has been under 3% since late July, as measured weekly by Freddie Mac. When Fed Chairman Jerome Powell announced in March the Fed would purchase bonds, it was 3.65%.