Mortgage rates fall to record lows this year, but challenges remain.
Mortgage rates are continuing to head downward as the realities of the coronavirus pandemic and the upcoming presidential election puts pressure on the market.
The 30-year fixed-rate averaged 2.8% for the week ending Oct. 22. Falling below the record set just last week. The new record stands about a full point below what the rates were a year ago.
This was the 11th week which mortgage rates set a new low this year alone. On average, rates have fallen to new lows once every four years. This year we are setting new record lows every 4 weeks.
The 15-year fixed-rate mortgage meanwhile decreased to an average of 2.33%.
This downward trend means that more homeowners, even owners who bought last year, could save money by refinancing.
Loan qualifications have tightened, inventory is low, so it’s unclear how much the low rates are helping the housing market. But mostly, home prices have increased across the country.
Where rates go moving forward remain unclear. Generally, mortgage rates track the direction of long-term bonds, usually the 10-year Treasury, but even that relationship has weakened over the course of the crisis.
The low cost of borrowing has opened up opportunity for people to save money. This money could be used to increase savings for retirement, education costs, childcare costs, and living costs. It’s especially important right now to review your plan and leverage any opportunity this trend has created.