30-year mortgage rate slips to new record low

Mortgage rates again plummeted for umpteenth this year, with a 30-year fixed slippery 3.09 percent, the lowest in a weekly survey of big banks.

On the same day the news comes that the Federal Reserve announced that it would hold interest rates steady at almost zero and indicated plans to keep them there for at least three more years. The Fed’s move to keep rates low has not sent the cost of borrowing everything from car mortgages to depths since the 1950s.

Bangkok’s chief financial analyst Greg McBride, CFA, says “low interest rates are candy for stock market investors and the Fed just sets a whole bucket of dolls on the front porch.” “But savers and retirees have held their feet when the Fed has cut rates to zero, and now the shin has kicked in saying they won’t be in a hurry to reduce inflation.”

Mortgage rates have not been set by the Fed. They track the 10-year Treasury rate, which has eradicated new lows this year as an epidemic wreaked havoc on the economy. The 10-year business today stands at 0.685 percent after starting at around 1.9 percent in 2020.

Meanwhile, Fannie Mae, a government-sponsored agency, said today that mortgage loan lending is expected to reach an all-time high of $ 3.9 trillion this year.

“We believe that a lower rate environment will support refinancing demand over the forecast horizon,” Fannie Mae said in a statement. “At the current interest rate of 2.86 percent, we estimate that there is at least half a percent incentive to refinance approximately 69 percent of the outstanding first-line loan balance.”

Fannie’s rates do not include the points and some other fees that Bankrate has included in its survey.

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