- The US 30-year fixed mortgage rate fell to 2.86% from 2.93%, its lowest level in Freddie Mac data going back nearly 50 years.
- The rate has hit record lows nine times in 2020, fuelling the housing market’s rally throughout the coronavirus pandemic.
- Though the housing market’s strength persisted through the summer, “it will be difficult to sustain” due to a lack of supply, Sam Khater, chief economist at Freddie Mac, said in a statement.
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Mortgage rates in the US reached a new low, further establishing the housing market as a bulwark against the coronavirus’s economic fallout.
The 30-year fixed mortgage rate fell to 2.86%, Freddie Mac said in a Thursday release. The level is its lowest in data going back nearly 50 years and down from 2.93% last week.
It’s also the ninth time this year that the 30-year mortgage rate notched a record low. The last record came in early August, when the rate fell to 2.88%.
The housing market has stood out as a shining light in the US economy while other indicators point to lasting damage. Homebuilding and purchase activity has surged in recent months on the back of cheap mortgage rates. Some homeowners have also boosted their economic health through refinancing at the low levels.
While encouraging, the housing market’s hot streak will eventually meet hurdles elsewhere in the virus-slammed economy. The unemployment rate remains elevated, and jobless claims data published Thursday signalled prolonged pain in the labour market. The housing market may even outpace itself, according to Freddie Mac.
“Heading into the fall it will be difficult to sustain the growth momentum in purchases because the lack of supply is already exhibiting a constraint on sales activity,” Sam Khater, chief economist at Freddie Mac, said in a statement.
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