As expected, showings popped up again after the July 4th holiday… as did new and pending listings.
The average US mortgage rate fell to 2.98% this week, down from 3.30% last week according to Freddie Mac. The average 15-year rate fell to 2.48%. According to Sam Khader, chief economist at Freddie Mac, this is the first time in 50 years that mortgage interest rates have fallen below 3.0%.
Chris Low, chief economist of FTN Financial in said…
“Low mortgage rates boost housing demand which means stronger residential investment, and already we are seeing that.”
He said, “When you consider all the components of the economy – exports are not growing, business investments are not growing – that means households are going to carry the economy for the next couple of years in the form of consumption and retail.”
Buyers, reap the benefits of capitalizing on today’s low rates. As shown in the chart below, the average monthly mortgage payment decreases significantly when rates are as low as they are today. The chart below shows the impact of rates at 3.03%… and yesterday they fell even lower!
A lower monthly payment means savings that can add up significantly over the life of a home loan. It also means that qualified buyers may be able to purchase more home for their money. Maybe that’s a bigger home than what they’d be able to afford at a higher rate, an increasingly desirable option considering the amount of time families are now spending at home given today’s health crisis.
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
