- The US 30-year fixed mortgage rate fell from 2.93% to 2.86%, its lowest level in the Freddie Mac data, going back nearly 50 years.
- The rate has been recorded nine times in 2020, fueling the housing market rally in the coronovirus epidemic.
- However, the strength of the housing market remained through the summer, “it would be difficult to maintain” due to supply shortages, Freddy Mac chief economist Sam Khater said in a statement.
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The mortgage rate reached a new low in the US, setting up the housing market against the economic collapse of the coronovirus.
The 30-year fixed mortgage rate fell to 2.86%, Freddie Mac said in Thursday’s release. This level is the lowest in the last 50 years and is down from 2.93% in the previous week.
This year is also the ninth time that the 30-year mortgage rate has recorded a record decrease. The last record came in early August, when the rate fell to 2.88%.
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The housing market stands as a bright light in the US economy, while other indicators point to permanent losses. Home construction and buying activity have increased in recent months on the back of cheap mortgage rates. Some homeowners have also promoted their economic health through low-level refinancing.
Encouraging, the housing market’s hot streak will eventually meet barriers elsewhere in the virus-slammed economy. The unemployment rate has gone up, and unemployment claims figures published on Thursday indicate long-term pain in the labor market. According to Freddie Mac, the housing market can also outdo itself.
“It will be difficult to sustain a growth in purchases due to a fall in supply because supply shortages are already exhibiting a constraint on sales activity,” said Freddy Mac chief economist Sam Khattar in a statement.
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