Mortgage rates fell this week, reaching another record low, according to a Bankrate survey released Tuesday.
The average cost of a 30-year fixed-rate mortgage fell to 3.01 percent from last week’s 3.03 percent in Bankrate’s national survey of lenders. The 15-year fixed also set a new record, falling to 2.44 percent. Bankrate includes origination points and other fees in its figure. The 30-year fixed-rate loans in this week’s survey included an average total of 0.32 discount and origination points.
Mortgage rates fell steadily since the coronavirus recession began earlier this year, propping up a surprisingly strong housing market. However, rates had ticked up a bit this month as stocks soared on optimism about the presidential election, potential vaccines for the coronavirus and an improving labor market.
The drop in mortgage rates reflects mixed signals from the economy. An autumn spike in coronavirus cases undermined hopeful signs that a COVID-19 vaccine soon will be available, and the economic recovery so far has been uneven and incomplete. Yet stocks rose to new records Tuesday.
“Vaccine optimism is offset by virus case reality,” says economist Joel Naroff.
Mortgage experts polled by Bankrate expect rates to remain the same in the coming week. Nearly two-thirds rates to stay the same. The 10-year Treasury yield, a key indicator for mortgage rates, rose to its highest level in months, flirted with 1 percent earlier in the month but had dipped as of Tuesday.
“The 10-year is trading at .877 percent, which is virtually unchanged from last week. As the White House transitions the new administration will take shape and so far the market likes what it is seeing. Coronavirus will continue to lead the news as cases skyrocket and the country locks down a little more,” said Mitch Ohlbaum, a mortgage banker with Macoy Capital Partners, Los Angeles.
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